Fuel surcharges for international air express shipments fell in February after oil prices continued to drop in recent weeks, CEP-Research analysis has shown.
In Europe, all the four integrators reduced their surcharges in February. FedEx’s surcharge went down from 9% in January to 7% in February. Similarly, UPS reduced its surcharge to 9% this month, down from 10% in January. The DHL surcharge dropped from 11% last month to 9% in February while TNT also reduced its European surcharge to 12.25% this month, down from 13% in January.
In the USA, FedEx and DHL both reduced their surcharge from 2.25% in January to 0.75% in February. UPS also put down its surcharge from 4.25% last month to 3% in February. TNT was the only integrator to keep its US surcharge in February at the level of the last three months of 6%.
In Asia Pacific, all the four integrators reduced their surcharges this month. FedEx reduced its surcharge from 7% in January to 4.5% in February. The UPS surcharge also fell to 7% this month, down from 9.25% in January. Similarly, DHL also put down its Asia surcharge from 11% last month to 9% in February, which was also the case with its European surcharge. TNT’s Asia surcharge also dropped from 12.75% in January to 11.75% this month.
Global oil prices have showed some ups and downs over the last month with a downward trend at the end of the month. WTI crude traded at $29.69 yesterday at the end of the day, down from over $32 a month ago and nearly $40 in the beginning of December. Brent crude also experienced some ups and downs over the last month but came back to about the same level as a month ago trading at $32.88 yesterday at the end of the day. These figures are extremely low compared to July 2014 when Brent crude traded at $115 and WTI crude above $103.
The International Energy Agency (IEA) warned in its monthly report of the oil market that oil prices could fall again, following a recent price uptick, as Iran increased its output from 80,000 barrels a day to 2.99 million barrels a day after sanctions against Iran were lifted.
“It is very hard to see how oil prices can rise significantly in the short term. In these conditions the short-term risk to the downside has increased,” IEA said in its report. The crude output of the Organization of the Petroleum Exporting Countries (OPEC) rose 280,000 barrels a day in January to 32.63 million barrels a day, boosted by Iran. Global oil supplies, however, dropped by 0.2 million barrels a day to 96.5 million barrels a day as higher OPEC output only partly offset lower non-OPEC production, IEA added. Overall, the global oversupply in oil and the stronger US dollar are likely to continue to put pressure on oil prices.
The air express fuel surcharges in February 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.
