Commentary: Up in air over surcharge calculations
When Emirates SkyCargo announced it was changing the way cargo surcharges are calculated — moving from a system that charges for actual weight to the new plan of applying chargable weight to the calculation — on Sept. 1, it joined a growing list of airlines who are also experimenting with new rates.
Lufthansa announced in July it’s changing its system, and Korean Airlines has also switched its surcharge for all flights except those routing to Israel and Turkey.
These new policies have raised the ire of shippers represented by the European Shippers’ Council. These changes, they say, could cost them 10 percent to 20 percent more when shipping the same goods. With three carriers adapting to this new system, shippers are not only angry, but worried a trend will develop.
“I’ve received a lot of emails from a lot of air cargo users from different sectors — high-tech, pharma, automotive, you name it — and they are definitely not happy with this change,” Joost van Doesburg, air freight policy manager at the council, told American Shipper.
The fees themselves aren’t the issue. Shippers, as a whole, don’t like surcharges, but they are not protesting paying them. Emirates has not adjusted the actual rates itself since late July — the fuel surcharge will stay at $0.95 per kilogram, and it will cost $0.12 per kilogram for the security fee — but the change in calculations will nevertheless add up to increased costs for shippers.
Van Doesburg noted airlines are fiddling with the surcharges because while rates can be negotiated, surcharge fees are generally untouchable. Changing the calculations is a way to help carriers recoup some of their losses in this troubling economic time without having to renegotiate with shippers.
Shippers are also concerned, he said, because they don’t see the correlation between a rise in costs for the airline and the hike in surcharges. Simply put, these extra security and fuel fees are not tied to any price increases in the market; fuel prices, for the most part, are actually on a downward trajectory.
If the new fees, which shippers have called “substantial,” are too much to bear, van Doesburg thinks shippers would start turning away from air transport even more than they already have.
“We’re in a deep economic crisis, and shippers want to reduce costs instead of increase costs. They already are evaluating their air cargo use, and they are moving away from the air cargo mode. They are moving toward ocean, and the new trend is definitely rail freight from Asia to Europe,” he said.
Of course, this is not just a European issue, and the ESC is lobbying on behalf of shippers globally for a switch back to the normal way of doing business. Van Doesburg has advised the airlines against the changes, but is focusing on bringing his argument to freight forwarders, who may hold greater sway with the carriers. No matter who he talks to, though, the message remains the same.
“It’s the No. 1 topic for shippers,” he said. “It’s really important, and shippers are really negative about these changes. We hope we will not see a trend.” (Jon Ross)