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Higher Surcharges Expected Due to Higher Oil Prices

[ March 14, 2017   //   ]

In November 2016, the Organization of the Petroleum Exporting Countries (OPEC) cut oil production causing higher oil prices. Since January 1, 2017, jet fuel prices rose 8.6 percent, and higher oil prices have a substantial impact on carriers’ operational costs, which they pass on in the form of fuel surcharges.

Japan carriers have announced a fuel surcharge on outbound flights, while Air India will increase their fuel surcharge for overseas flights.

Travel industry executives say the increase in the fuel surcharge is in line with rising fuel costs. According to John Nair, Head of Business Travel at Cox & Kings travel agency, “With aviation turbine fuel prices climbing, airlines will begin increasing their fuel surcharge. However, as we enter the peak season for travel, we are bullish that despite the revision, travel demand will not come down.’’
Shippers can expect to pay more to move their cargo in the very near future. FedEx Trade Networks will monitor the situation and advise our customers when any changes are announced.
For more information, please contact your local FedEx Trade Networks Transport & Brokerage office. For a complete list of office locations, go to http://www.ftn.fedex.com/locations/index.html.

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