Why are Fuel Costs High and How it Affects the Shipping Industry?
Upon reopening the economy after strict, consecutive lockdowns due to COVID-19, and the recent Russia vs Ukraine war that shook the whole world, their aftermath took the toughest toll on the world’s fuel costs. This fast, continuous surge of fuel costs has caused panic and inconvenience to countries across the globe.
In the Philippines, shipping operators before the Ukraine war had already imposed bunker fuel surcharges in light of existing fuel price hikes. After the war, it is evident that fuel costs would only be more expensive than they already are. This is no good news for an international freight forwarding company like Excelsior and their customers.
With this, here are the negative effects of high fuel costs that everyone must take into account and prepare themselves for:
The Philippine Civil Aeronautics Board has announced a passenger fuel surcharge to Level 4, which means P108 to P411 per passenger for one-way domestic flights, and P543 to P5,026 per passenger for one-way international flights. On the other hand, the cargo fuel surcharge is at Level 11, equating to a hike of P1.82 to P5.34 per kg for domestic flights, and P6.03 to P44.80 per kg for international flights. And the worse part? These are all before the war.
Long Transit Times
Since European Union and the United Kingdom sanctioned Russia for its invasion of Ukraine, Russian airspace has barred their international air freight forwarders in return. This results in difficulties for said forwarders going to East Asia, and inconveniences passengers through longer transit times.
Delays from Cargo Inspections Bound to Russia in Compliance with Sanctions
Again, international forwarding got more complicated since Russia was penalised by European Union countries.
Fortunately, freight forwarders like Excelsior will continue to operate despite high fuel costs and low oil supply. Above all, delivering excellent and high-quality customer service is still their main agenda regardless of today’s economc dilemmas.
Allow their infographic to tell you more about fuel costs.
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