French forwarders slam fuel surcharges

French freight forwarders have called on airlines to end separate fuel surcharges, which they argue are no longer relevant.

TLF Overseas, the French freight forwarders organisation representing 95 per cent of general air cargo transactions, expressed its “incomprehension” of a situation that requires “more transparency and real positive economic signals from the carriers”.

The strongly worded statement comes after Middle East airline Emirates SkyCargo last week confirmed that it is moving towards an all-inclusive freight rate which effectively eliminates separate security and fuel surcharges.

TLF Overseas welcomed the Emirates move and encouraged other airlines “to follow suit”.

The Paris-based forwarders lobby, a member of forwarders groups CLECAT in Europe and international association FIATA, says that fuel surcharges were “primarily temporary,” but became “permanent and uncorrelated to the variation of the oil prices, apart from when they have been taking a bullish direction”.

It added: “Air carriers were indeed more likely over the past 13 years to increase their fuel surcharge as soon as the oil price rose rather than granting cuts when it decreased.”

Noting that the oil price has now fallen below $50 a barrel, – a 50% drop in the past five months and the lowest rate for a decade – TLF Overseas observes: “It is now clear that air carriers are not allowing their customers to benefit from the savings achieved.”

The forwarders association added: “Beginning in 2002, the airfreight supply chain experienced a significant increase in its operating costs due to the huge increase in fuel prices. Air carriers had at this time implemented a ‘temporary’ fuel surcharge whose objective was to pass the rising fuel costs onto freight customers.

“Airfreight forwarders and air cargo agents have always accepted the real impact of oil prices on the operating costs of the airlines, and the profession even took the responsibility to collect this surcharge, on behalf of the carriers, from their exporter/importer customers.”

TLF Overseas argues that it is “clear that the significant and steady decline of the oil price implies the questioning of this [fuel] surcharge, particularly in a difficult economic situation in Europe for a majority of freight companies and industrial players since 2008”.

It says that the current situation offers “a real opportunity for air carriers to simplify their rate structure. This would meet a major demand from shippers, as they recently expressed it in their White Paper on airfreight, published by the European Shippers Council.”

The French association agrees that air carriers must be profitable to ensure their economic sustainability.

“TLF Overseas does not dispute this economic basis but warns that this should be the result of the pricing policy of each air carrier involved in the market, and not the consequence of a continuous amount of surcharges and fees – the continuation in France of paper air waybill taxation at the time of e-freight and digitalization.”

TLF Overseas states that it is in favour of a dialogue with cargo airline representatives, and calls for “a realistic solution” in order to resolve the ten-year-old issue of fuel surcharges.

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