In a move generally applauded as overdue by many freight forwarders, Emirates’ SkyCargo freight division said it will return to a simplified “all-in” rate structure that eliminates the addition of various surcharges for fuel, security and other variables.
According to a letter sent to its customers on Dec. 31, 2014, SkyCargo said the single-charge structure would begin Feb. 1 for airfreight shipments to and from Europe and March 1 for all other Emirates flights.
The single fee, SkyCargo said, would be based on weight and would include fuel and security fees folded into one price. Along with added fuel and security fees, the new policy would also eliminate surcharges for other criteria, such as volume.
Forwarders and shippers have called for the end of surcharges for years, partly because their complex structure makes it hard to quote a definite price for customers, and partly because their commissions did not take into account the added fees.
With crude oil trading for just under US$49 per barrel, as of Jan. 7, there is no longer a justifiable need for a fuel surcharge. However, Emirates made no announcement about the reduction of its base rates or any changes to the mechanism of the all-in price structure in case oil prices suddenly spike or an international event raises security concerns in the near future.
So far, because of this uncertainty, the reaction by shippers and forwarders to SkyCargo’s announcement has been positive, but muted.
Robert Keen, director general of the British International Freight Association (BIFA), said the Emirates SkyCargo decision is “a step in the right direction, provided it leads to the transparency that freight forwarders require.” He also applauded SkyCargo for providing “simpler and more transparent cost structures,” adding that SkyCargo’s decisions could be a response to “previous comments that freight forwarders stop accepting at face value opaque and unjustified surcharges.”
Lucas Kuehner, global head of air freight for Panalpina, recently told The Loadstar that the company welcomes “any simplification of the pricing structure and have long since asked airlines to rid themselves of surcharges,” and encouraged other carriers to follow suit. “This is about going back to basics and what our customers want, since they look at all-in cost when making freight decisions.”