Fuel surcharges for international air express shipments are showing mixed trends this month butlook set to soar in February and March due to the current sharp rise in oil prices, CEP-Research
analysis shows.In January, fuel surcharges have fallen in the USA and showed mixed trends in Europe and Asia.In the USA, FedEx Express, UPS and DHL Express surcharges for domestic and international airexpress shipments all dropped from 10% in December to 9% this month. These reductions, however,reflect their decision to offset January price increases by scaling back the fuel surchargelevels.
In Europe, FedEx, DHL and TNT raised their fuel surcharges in January while the UPS surchargeremained at the same level. The FedEx surcharge went up to 14.5% for the period 3 January – 6February from 14% in December. In a similar way, DHL raised its fuel surcharge to 14% this monthfrom 13.5% in December. The TNT Express European surcharge also went up from 17% last month to thecurrent 17.5%.
In Asia, surcharges of the US operators FedEx and UPS fell in January while DHL and TNT raisedtheir surcharges. FedEx, whose surcharges vary by country in Asia, went down to 11% in January from12.5% last month both in Singapore and Hong Kong. In a similar way, UPS surcharge dropped from17.5% in December to 16% this month. In contrast, DHL raised its January surcharge to 18.5% from18% in December. The TNT surcharge also went up from 15% to 17% this month.
The air express fuel surcharges for January reflect the oil price level two months ago. The fourleading express carriers calculate their surcharges based on indices showing the previous month’soil price level and announce them in advance for the following month. This results in a two-monthtime lag between prices and the surcharge level.
However, oil prices have been rising considerably during December and January, indicatingfurther increases in fuel surcharges over the next two months. Compared to mid-November when oilprices traded slightly above $80, Brent Crude already surpassed the $90 mark trading at $95.7% inLondon this morning and thus getting closer to the $100 barrier. On the New York MercantileExchange, oil was slightly lower at $89.25.
