Date: Aug 21 2017
Title: Air Freight Market Update Report for Week 34


Airfreight market conditions throughout Asian and Indian Subcontinent gateways remain unchanged from last week. Shanghai and Hong Kong are anticipating strong demand for space from electronics shippers associated with new product launches.  Cargo routed from Southeast Asian gateways continue to be plagued by transit delays caused by lingering congestion at some transit hubs. Booking cargo in advance is highly recommended.

Note that air freight operations in Xiamen will be impacted by the BRICS summit scheduled for September.

Following are highlights from around our Asian network.

Bangladesh: There is approximately 2,000 to 3,000 tons of backlogged air freight cargo at DAC. Airlines require one week advance booking. Much of the backlog is being caused by cargo screening requirements that have not been fully implemented at the airport. Consequently air freight is being converted to sea/air via CMB. 

China:
Xiamen: The city will host the ninth BRICS (Brazil, Russia, India, China and South Africa) Summit from September 3rd- 5th.  Many airlines such as ANA, CI, KA will not operate freighters out of or into Xiamen airport during the period August 31st - September 6th. During this period TGL will be trucking air freight from XMN to HKG for uplift.
Shanghai: There is adequate space to meet demand and rates are stable. Apple is planning to ramp up air shipments of the iPhone8 this week – carriers are expected to boost rates in line with demand for space.
Shenzhen and Guangzhou: Hot weather conditions continued to plague carriers last week causing them to reduce their payloads. Consequently space is tight to US gateways and advance booking is required. 
Hong Kong: Demand for space remains strong and carriers report very tight available space. Apple’s launch of the iPhone8 is consuming a lot of available air freight space and has put a lot of pressure on the market. The situation is impacting US gateways, in particular ORD. Shippers are recommended to place bookings 2 – 3 days in advance.

India:
Delhi:  Strong demand for space at origin combined with delays at transit hubs has enable carriers to impose higher rates. Customs EDI system is still not working properly adding to delays in processing of documents for both export and import shipments.
Kolkata: Strong demand from perishable shippers has enabled carriers to increase. Air freight cargo will only be accepted against advance booking and subject to onboard confirmation. 
Bangalore: Available space is tight and rates remain high. Cargo will only be accepted against advance booking and is subject to onboard confirmation. 
Mumbai:  There is no back-log although airlines will accept a booking if the onward booking at transit hub is confirmed. Custom’s EDI system remains a problem and is causing extra time to process exit and entry documents.
Chennai:  Market conditions are normal for the most part - there is adequate space to meet demand.  Most carriers are accepting cargo on Express rates because of ongoing delays at transit hubs.Transit times are running 4 – 5 days longer than normal.

Indonesia: Available space to the US is tight. CI is reporting a backlog of 10 tons at CGK. Pax and freighter flights are fully booked this week and rates are high. 

Korea: Transfer cargo from China is building. OZ announced rate increases in the range of 9% to 11% effective August 21st and KE is expected to follow suit.  Carriers have not announced any increases to the number of scheduled flights; therefore we can expect a serious shortage of space and backlogs to begin accumulating starting this week. 

Sri Lanka: Although the volume of transit cargo dropped last week, overall cargo volumes remain on the high side. Available space for large shipments to US and European gateways is tight.  Cargo screening problems experienced in DAC the last two weeks caused an influx of sea/air transit cargo to transit through CMB via air.  

Taiwan: TPE airport is reporting a cargo backlog of approximately 80 tons. Carriers have increased airfreight rates and space is tight to US and European gateways. 

Thailand: The volume of exports moving via air remains strong and carriers are anticipating demand to increase through the end of the month. Transit times are running longer than normal and one week advanced booking is required. 

Vietnam: Demand for space to European gateways has eased.  The situation to US gateways remains problematic with demand exceeding capacity.  Transit times are running a week longer than normal. 

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