Good evening All
We’re all aware of the collapse in the price of crude oil, which has recently fallen below USD 50 a barrel, a fall of 57% since its peak in Jun-14 - and the consequential fall in the cost of petrol and diesel at the pumps - a welcome relief to hard pressed hauliers and motorists.
The government have made it very plain that they will be watching the oil companies extremely closely to ensure that these savings are passed on to motorists / hauliers to benefit the wider economy but it seems we have some sort of disconnect when it comes to international logistics.
We’re all aware of the collapse in the price of crude oil, which has recently fallen below USD 50 a barrel, a fall of 57% since its peak in Jun-14 - and the consequential fall in the cost of petrol and diesel at the pumps - a welcome relief to hard pressed hauliers and motorists.
The government have made it very plain that they will be watching the oil companies extremely closely to ensure that these savings are passed on to motorists / hauliers to benefit the wider economy but it seems we have some sort of disconnect when it comes to international logistics.
We manage the freight and logistics models for customers of various sizes and
deal with several forwarders so feel that we have a pretty good perspective.
And here’s my point - with air freight in particular - how it is that we’re not seeing reductions in air freight fuel surcharges. We’ve done some analysis and have come to a rather disconcerting conclusion. It seems the price of jet fuel and crude are closely linked, and that jet fuel costs have fallen by 45% between Jul-14 and Jan-15 however fuel surcharges have hardly moved. On five major airlines flying across the North Atlantic, we found that fuel surcharges were an average of USD 1.07 per kilo last April, and many had been at that level for at least a year. And today, the average fuel surcharge for those same 5 airlines is, would you believe it, USD 1.06 per kilo!
http://www.iata.org/publications/economics/fuel-monitor/Pages/price-development.aspx
Given that on many trade lanes, FSC is a significant part of the air freight cost, and sometimes as much or even more than the core airport-airport rate, then surely the airlines have a duty to pass on these large falls in their costs via forwarders to UK importers and exporters just as the oil companies have with petrol and diesel at the pumps.
Andy Cliff
Director
Straightforward Consultancy Ltd - logistics simplified
And here’s my point - with air freight in particular - how it is that we’re not seeing reductions in air freight fuel surcharges. We’ve done some analysis and have come to a rather disconcerting conclusion. It seems the price of jet fuel and crude are closely linked, and that jet fuel costs have fallen by 45% between Jul-14 and Jan-15 however fuel surcharges have hardly moved. On five major airlines flying across the North Atlantic, we found that fuel surcharges were an average of USD 1.07 per kilo last April, and many had been at that level for at least a year. And today, the average fuel surcharge for those same 5 airlines is, would you believe it, USD 1.06 per kilo!
http://www.iata.org/publications/economics/fuel-monitor/Pages/price-development.aspx
Given that on many trade lanes, FSC is a significant part of the air freight cost, and sometimes as much or even more than the core airport-airport rate, then surely the airlines have a duty to pass on these large falls in their costs via forwarders to UK importers and exporters just as the oil companies have with petrol and diesel at the pumps.
Andy Cliff
Director
Straightforward Consultancy Ltd - logistics simplified
Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ
Tel : 07934 443492
Email : andy@straightforwardconsultancy.co.uk
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
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Skype: andy.cliff1@skype.com
