Wednesday, 25 September 2013

More airlines change their fuel surcharge basis (from actual weight to chargeable weight)

Good afternoon All

This change of tack on the basis for calculation of fuel surcharges (FSC) has been gathering pace and now we have 5 major carriers who have moved from Actual Weight to Chargeable Weight. So far no American carriers.

Air France/KLM
Singapore Airlines
Japan Airlines

Generally speaking, most airlines have always used the cargo's dead (actual) weight to assess fuel surcharge, primarily because the fuel cost is linked to the weight of the payload on the aircraft and so actual weight has seemed the fairest way to pass on the costs of the rising price of jet fuel.

The irony here is that FSC has been in place since 2001-2002 and although it began as a lowly USD 0.10-USD 0.20 per kilo, for the past five years, it has hovered between USD 0.80 and USD 1.30 per kilo. So why, do you ask, don't they just build it into the core air freight rates? Why not indeed..

It will be interesting to see how this affects the market - it will certainly hit customers who ship volume cargo (greater than 6000cc per kilo).

Kind Regards

Andy Cliff

IED found on military cargo flight from Afghanistan to Dubai

Good afternoon All

Seems that no more than a day goes by without us witnessing (ie Nairobi, Kenya) or hearing about some terrorist activity. How an IED could make it on to a military flight is very concerning.

Kind Regards

Andy Cliff

Asia-Europe ocean rate increases - there may be trouble ahead (as the song goes...!)

Good afternoon All

It's been a while since I last posted so apologies for that but we've been very involved with new customers, re-organising their freight and Customs models and so our blogging has suffered somewhat.

I received this bulletin a few days ago from a large forwarder regarding Asia-Europe which is worth sharing.

It's hard to believe the bulletion given that rates eased in September after the hefty hikes in July and August but certainly one to watch.And some light relief for you below.


Asia to Europe –  Surcharges 1st November 2013

Dear valued customer

Please be advised that all carriers operating services from Asia to Europe have indicated that it is their intention to impose various surcharges effective sailings on/after 1st November 2013.
Depending on the carrier choice these surcharges are being imposed in many ways and to date we have received notification of the following;

 1)      General Rate Increase

 2)      Rate Restoration Fee

 3)      Structural Revenue Recovery 

At the moment the figures indicated are 600 - 900 USD per TEU – please note that should these increases / surcharges be implemented we will have no choice but to review our rate levels from sailings on/after 1st November 2013.

We will continue to monitor this situation with all our nominated carriers and will continue to keep you updated.

We would like to thank you for your continued support and if you require any further information then please do not hesitate to contact us.


Kind Regards

Andy Cliff

Tuesday, 3 September 2013

Pretty big news in forwarding (as far as I'm concerned)

I'm on vacation this week however I've been reading my emails of course and keeping on top of our business and I noticed a bulletin with some quite big news - DSV Air & Sea have agreed to purchase the total share capital of SBS Worldwide, the hitherto independent and it has to be said, pretty dynamic mid-sized freight forwarder which made its name on USA-UK Eastbound air freight and LCL ocean services from Chicago and New York in particular.

I'm just really surprised that SBS even agreed to the deal as they seemed to be very successful and almost maverick in their approach. Having been through several freight forwarding integrations/mergers myself (WTC Air Freight & Burlington Air Express, Air Express International and Danzas and latterly DHL Global Forwarding and Exel Freight Management) I know how they can disrupt business.

This happens because:-

1. Staff at both companies feel there may be redundancies and begin to leave

2. When  the businesses are physically integrated, operations and service are often affected and customers can decide to leave

3. The cultures can be very different and this can take years to resolve itself

4. Often, the good people at the company being bought decide to leave and take customers with them, devaluing the asset which has been acquired

I dont know whether any timetables have been set for the integration but I cannot see DSV letting SBS run as a separate entity.

Certainly one to watch.

Kind Regards

Andy Cliff