Whack, whack whack: it's my winter almanac
Goodbye 2022 … uh oh, here comes 2023
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It’s not just forwarders who are fed up with fuel surcharges. Now shippers are asking for year-long fixed rates.
Of course, no forwarder is able to offer that (unless at a very high cost to the shipper), in the same way that airlines can’t. Fuel is too volatile and too expensive to take a chance on.
But some forwarders are now considering offering a kind of fuel tracking service, within a percentage point or two of prices, to give a little bit more stability to the shippers. The forwarders are likely to take a hit on this, but will suffer that in exchange for longer term contracts.
But at some point, they will start to want to share that hit with the carriers, and the extra cost will be passed on through the chain.
No one has come up with a decent answer to stabilising rates. Perhaps there isn’t one. Opec, the global economy and socio-political issues are well beyond the influence of the aviation industry, even beyond the dark arts of Bisignani.
But an issue which affects customers so dramatically means that carriers will have to come up with something, if air cargo is to be a viable, sustainable, strong product. And there is, potentially, a long-term solution. And it is one which the aviation industry should be taking more seriously.
Alternative fuel prices are expected to be far more stable than oil. And alternative fuels don’t have to be so far off the radar as they are. Cargo teams might be leaving this all to the passenger side of the business, but the louder the clamour the faster it will happen.
Environmental issues have got lost under a carpet of concerns about security and e-freight. But for a modern, progressive industry, which air cargo must become, alternative fuels are going to be critical to its future. And it needs looking at now, not tomorrow. Not only will this (admittedly in the long rather than short term) satisfy shippers’ increasingly demanding requirements for cleaner transportation, but it could also end the terrible burden that fast-moving fuel prices place on airlines and their customers.
Just one more environmental point. For once, airlines can look over at their shipping line colleagues and breathe a sigh of relief. Not over emissions, of course. But sea freight’s secret shame has been that the floor of containers is usually made of tropical hardwood, often gained by illegal logging.
The container industry uses approximately 1.2 to 1.5 million cubic metres of hardwood annually. Apparently it’s lovely sturdy stuff, and you can nail the cargo down nicely. Never mind the rainforests. Maersk yesterday committed to ending the use of uncertified hardwood within the next 18 years, the lifetime of a container. It is looking to use wood from responsible forestry, recycled plastic or bamboo instead.
So next time someone suggests that sea freight is a more environmentally friendly transport solution, just mention that. And then tell them your company’s plans for a switch to alternative fuels.
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