Is 'surcharge' really a dirty word?
The word “surcharge” has become a filthy term that, when used among supply-chain partners throughout the world, is evocative of shady dealings and a lack of transparency. Whether the term has gained this connotation with good reason or not, industry insiders view carriers that tack these charges onto seemingly cheap base rates with intense suspicion.
And since imposing surcharges is an industry-wide practice, this mistrust isn’t limited to one region — it’s a global phenomenon.
Most representatives from carriers, for their part, are hesitant to speak with shippers and forwarders (and, especially, enterprising reporters) about surcharges due to another globe-spanning occurrence. The U.S. Department of Justice’s years-long investigation into surcharge fixing has been reduced to the occasional headline, but executives in high places are still reticent to talk about the seemingly straightforward topic of surcharges.
Everyone sets surcharges, but nobody really wants to explain why or how. During our investigation of the subject, a number of carriers sent outright refusals to talk on the record.
The Dutch Shippers council is getting tired of all the secrecy. The council, led by airfreight guru Joost van Doesburg, is starting to explore ways to pressure carriers — either directly or through dealings with forwarders — to do away with fuel and security surcharges. Van Doesburg has quite an argument, which will no doubt spread to shippers’ councils around the world if his methods prove even marginally successful.
Surcharges are ugly tools, but they’ve really been the least of the industry’s worries these past few years. Yes, the economic malaise has affected airfreight profitability at all levels of the supply chain, and the pain probably won’t ease up for the rest of the year. But according to our 2012 forecast, everyone involved in the industry will be feeling a bit better about their chosen careers this time next year.
The halcyon days of 2007 are gone, perhaps forever, but activity should start to slowly improve in 2012, leading to respectable annual gains for at least the next decade. ASM and OAG Cargo have worked together to provide an all-encompassing forecast.
For those of you who didn’t get a chance to pop by our stand at Air Cargo Americas in Miami to share your thoughts about surcharges, the forecast or whatever else is on your mind, please shoot me an email at email@example.com or make contact with us on Twitter or Facebook.
These are exciting times for the industry, and creating a free-flowing dialogue is the only way to ensure nobody gets left in the dust when important decisions are made.
— Jon Ross is the editor of Air Cargo World.