Fuel surcharges for international air express shipments showed a mixed trend this month with both rises and falls depending on the operator and region while oil prices remain under pressure at the start of 2016 amid escalating tensions in the Middle East and concerns about Chinese economy, CEP-Research analysis has shown.
In Europe, FedEx, UPS and TNT reduced their surcharges in January. FedEx’s surcharge went down from 9.5% in November and December to 9% in January. Similarly, UPS reduced its surcharge from 10.25% in November and December to 10% this month. The TNT surcharge also went down to 13% in January from 13.25% in November and December. In contrast, DHL was the only integrator to increase its European surcharge from 9.5% to 11% in January.
In the USA, FedEx and DHL both reduced their surcharge from 2.75% in December to 2.25% in January. UPS also put down its surcharge from 4.5% in November and December to 4.25% in January. TNT was the only integrator to keep its US surcharge in January at the November and December level of 6%.
In Asia Pacific, FedEx reduced its surcharge from 7.5% in November and December to 7% for the period of 4-31 January. TNT’s Asia surcharge also dropped from 13.25% in December to 12.75% in January. UPS, however, increased its surcharge in Asia to 9.25% in January, up from 7.75% in November and December. Similarly, DHL also put its Asia surcharge up to 11% from 9.5% that it kept over the last three months of 2015, which was also the case with its European surcharge.
Global oil prices have showed a rather downward trend over the last month. WTI crude traded at $36.76 yesterday at the end of the day, down from nearly $40 in the beginning of December. Brent crude traded at $37.22, down from $42.5 a month ago. These figures are extremely low compared to July 2014 when Brent crude traded at $115 and WTI crude above $103.
Oil futures went up briefly on Monday after the news that Saudi Arabia would cut diplomatic ties with Iran, a development that could be seen as a threat to oil supplies. Today, however, oil prices fell again on the slowing pace of economic growth in China, the world’s second-largest consumer, and the news about Chinese rail freight volumes posting their biggest ever annual decline in 2015. A stronger US dollar put additional pressure on oil prices which couldn’t be offset by the slight upswing triggered by the escalations between Iran and Saudi Arabia.
Analysts expect oil prices to remain about where they are until either production drops or the world economy recovers and drives demand higher.
The air express fuel surcharges in January reflect the respective oil price levels two months ago. The four integrators calculate their surcharges based on indices showing the previous month’s oil price level and announce them in advance for the following month. This results in a two-month time lag between the fuel price and surcharge change.
