Fuel surcharges tighten the noose for exporters

Diversification is the key JOY ORLEK THE PRESSURE on local airfreight shippers is intensifying as the spiralling oil price forces significant fuel price hikes by all major airlines in time for the busy perishable season. Singapore Airlines hiked its fuel surcharge from 40 to 60 US cents on September 5. Lufthansa Cargo raised its levy from 0.40 to 0.45 euro cents per kilo on the same date while British Airways World Cargo is now charging GBP0.34/kg or local currency equivalent. “It’s killing the industry worldwide,” says Jas Forwarding’s Jaco Vlok. And for South African exporters, who have the added handicap of distance from markets in the Far East and Europe, the problems are compounded. “We’re competing with Kenya, Ethiopia and Zimbabwe where shippers tend to get good rates on year-round contracts with charter carriers. In addition, duty-free entry for goods from various African export countries adds further to South African exporters’ woes.” According to Vlok several major flower growers have gone into liquidation, squeezed out by the stiff competition. As is generally the case in winter, airline overcapacity has pushed down rates, but this is unlikely to continue into the busy summer perishable season. “We are now waiting to see whether airlines will go ahead with their annual rate increases, and if they do, it will seriously hurt the already reeling perishable industry,” says Vlok. Diversification is one of the mechanisms that has worked for his company. “Our total volumes have grown by 50% during the winter period, helped in no small measure by a contract for live plant cuttings moving to Amsterdam.”