As cargo airlines raised fuel surcharges yesterday, close on the heels of last month's increase, logistics operators began calling for a review of the way it is implemented.
Yet another increase in the fuel surcharge is expected next week.
Never before has the industry faced such 'fast and frequent' increases, say industry observers.
This has prompted the Fiata (the International Freight Forwarders Association) to make a general call to the airline industry to compensate the freight forwarding industry for the work entailed in collecting the surcharge.
"The response some airlines have given is that this is a temporary surcharge. But if we are to look back it has been enforced for the last 20 years," said Eisa Baluch, former president of Fiata. "So it is a fair proposal to work out the modality of compensation. Globally, Fiata is working through national logistics associations towards achieving this objective. Some airlines have been very favourable and sympathetic, while others are reluctant. The dialogue is continuing."
"There is no argument that the airlines must recover the increasing costs due to soaring oil prices. Where we as an industry find it unfair is that the freight forwarders are being used as a vehicle by the airlines to recover their costs and we are not compensated for it," he said.
He said the freight forwarder was being used as a collection agency, a banker and a credit agency because the airlines get paid upfront, while the freight forwarders often had to chase after payments from consignees.
While airlines generally notify the industry about their intention to increase the surcharge, yesterday's surcharge did not appear to be widely reported.
Freight fowarders who spoke to Gulf News said while there had been talk about an impending rise they had not been informed about yesterday's increase.
"Our problem is not the validity of the surcharges, but the way they are implemented. Can we not agree on a methodology of notification and the implementation period?" said Ashok Thomas, managing director of Falcon Logistics.
"If the surcharges go up unannounced after we have given a quote to a customer and collected the cargo, we cannot go back and increase it," he said.
The industry says it is caught between the airline and the customer.
Nishika Shyam, general manager of ME Freight, said, "We cannot commit to long-term quotes for customers in today's scenario."
"The airlines dictate the terms because you cannot do without them, but a customer can do without us. They come to us however because we give value-added services," she said.
