The development of new air freight surcharge system

It is well known that current airline surcharge system is causing difficulties for airlines, freight forwarders and, most importantly, shippers. Under the current system overall freight rates fluctuate according to changes in oil prices, causing instability for shippers and interfering with their long term planning.

Lufthansa recently made a step towards a new system where the surcharges will reflect not only oil price changes, but the true independent costs incurred by carrier (Lufthansa).

The formula will include fuel price, airport surcharges and currency fluctuations. While fuel price will be considered a fair element, which by the way, can be secured by financial instruments, the other two can raise some questions among shippers. First of all airport surcharges are announced well in advance and generally do not fluctuate as noted in Lloyd’s List shipper survey. Secondly, including currency fluctuations into surcharge calculations poses a question whether it is the service provider that is generally expected to bear this risk.

Changes are undoubtedly needed, but the question should be, as originally intended, settled not through trial and error but through close cooperation that will allow to reconcile very different interests.

Working for the benefit of shipper and being strongly aware of how important price stability is for our clients, we welcome recent developments. However, we shall closely watch how the complex system of surcharges will be evolving and provide our clients with expert advice.