As exclusively announced last week by CargoForwarder Global, Emirates Sky Cargo informed customers about their plans to introduce all-in rates. This way the carrier will shelve the
existing system of splitting off tariffs in rates and surcharges, as done together with most others during many years. We asked forwarding agents and their organizations what they think of the
new tariff structure EK SkyCargo decided to come up with.
Here, we document some reactions:
Nicolette van der Jagt, Director General or CLECAT, Brussels
The European Freight Forwarders’ organization CLECAT welcomes the move of Emirates SkyCargo to introduce all-in cargo rates. This will provide shippers and freight forwarders with a better picture of the full cost of shipment without the add-ons (fuel surcharges and security charges), which is a feature of the air freight industry, says Director General Nicolette van der Jagt.
“Today the issue of surcharges continues to raise questions with many shippers and freight forwarders,” states Ms Van der Jagt. “While we accept that air carriers offer different rate structures due to the impact of fuel prices on carriers’ operating costs, surcharges are ostensibly linked to the oil price.” It remains notable that carriers have shown a greater tendency to increase surcharges in line with a rising oil price than to reduce them when the oil price has fallen. “What we have seen is that additional surcharges for fuel costs tend to be ‘fixed’ and not to fluctuate on a large scale over time.” This is of particular significance as the oil price drops below $50 per barrel for the first time since 2009, notes Nicolette. The recent remarkable slide in oil prices should, by definition, lead to a corresponding reduction in fuel surcharges. “CLECAT believes that the current market situation represents a perfect opportunity for creating greater transparency,” she resumes.
Stephan Haltmayer, Managing Director, Quick Cargo Service, Frankfurt
“We welcome all-in rates. For the time being we are the money collector for the airlines. They have the guarantee of getting paid by us through the CASS system. This way, we collect fuel surcharges as well as security surcharges for free with a 100% performance. It doesn’t really matter whether our customers remit the money to us or not - the airlines can be sure to receive their money. We do the job for free but have all the risk on our side. If the carriers would at least give us the 6% IATA commission on the fuel and security surcharges (fsc/ssc) as done in the past when these charges were part of the IATA rate scheme it would be a fair deal. Unfortunately, this is not the case. Therefore, we appreciate the new approach on tariffs announced by EK SkyCargo.”
Stephan goes on to say: “The airlines now charge fsc/ssc on volume anyway, so where is the difference? If they can adjust the fsc every single month they might as well adjust the rates.”
He points out that in certain parts of the world where carriers demand nothing but surcharges due to extremely declined rates, particular in parts of China, some airlines tend to offer all-in rates on spot quotes already. “As I see it, all-in rates make the market more transparent and take the risk of price fixing on surcharges from the shoulders of the airlines. All in all I think it’s a smart move of EK to go back to all-in rates and to minimize risks.
“In the end we look at the rates as one anyhow. Our computer system compares rate and surcharges and shows us the end-to-end rate in one. Customers are not stupid they see it the same way. All things considered, shippers will benefit too because they can calculate with a rate that may not fluctuate as much as the surcharges do.”
John Roodt, Cargo Manager, Daigon International, South Africa
“On a personal level I prefer all-in rates. It cuts down on having to read the other info with regards to security fees, fuel surcharges, etc. At the end of the day we still need to pay these fees and yes an ‘all-in rate’ is preferred. Our clients also prefer an ‘all-in rate’ when we quote them. Our customers could not care less about all the other charges in between. To put it in a nutshell: yes, they are interested in one final quote figure.”
Robert Keen, Director General of BIFA, London
The British International Freight Association (BIFA) has given a cautious welcome to the news that Emirates SkyCargo is set to move to all-in pricing, including fuel and security surcharges, on air freight shipments to and from Europe from February 1st and on the airline’s global network from March 1st.
Last year, Robert Keen, Director General of BIFA called for the world’s container shipping lines to provide clearer explanations of the growing variety of surcharges that they apply and welcomes the Emirates SkyCargo announcement as "a step in the right direction, provided it leads to the transparency that freight forwarders require.”
He added that he felt that the move should: “provide simpler and more transparent cost structures, something that freight forwarders have been calling for, having faced various surcharges with questionable names and purposes from shipping lines and airlines.”
“Perhaps Emirates SkyCargo is responding to previous comments that freight forwarders stop accepting at face value opaque and unjustified surcharges.”
Statements collected by Heiner Siegmund and Marcel Schoeters