Hong Kong’s air freight carriers groan

The Hong Kong Association of Freight Forwarding and Logistics (HAFFA) has expressed strong protest against the sharply increased cargo fuel surcharges (CFS) in a recent statement. The organization expresses dissatisfaction with the massive price increases announced by several airlines and calls for immediate government action to regulate the situation.

In recent weeks, international oil prices have risen significantly, prompting many local airlines to substantially increase cargo fuel surcharges. HAFFA reports that a major airline has raised surcharges for long-haul flights by more than four times, while surcharges for short-haul flights have nearly quadrupled. These adjustments are not proportionate to the simultaneously increased international crude oil prices of about 30% to 40%. According to HAFFA, the nearly immediate and multiple adjustments of the surcharges cannot be aligned with actual operating costs.

Gary Lau, Chairman of HAFFA, expressed concern about the impact of these price increases: “This reckless escalation is nothing short of an unbearable burden for freight forwarders and will trigger a catastrophic domino effect. Airlines are likely to follow suit, causing overall logistics costs to spiral out of control. Ultimately, these additional costs will be passed directly to consumers, potentially destabilizing supply chains and jeopardizing Hong Kong’s economy.”

Lau emphasizes the need for airlines to provide clear and transparent explanations for the calculation and justification of the surcharges. He also calls for the establishment of a public mechanism that links adjustments to actual operating costs. Freight forwarders have the right to understand the basis of these fees in order to provide appropriate accountability to their customers. In the absence of sound justifications, the price increases could be interpreted as exploitation of the market situation.

Since 2016, HAFFA has been advocating for the maintenance of regulated CFS mechanisms by the government. Lau points out that the Civil Aviation Authority, as the regulatory body, has high credibility. This demand is a consensus within the industry. He criticizes the government for wanting to enforce the liberalization of fuel surcharges starting January 1, 2025, despite several consultations. In light of the current market situation, HAFFA urges the relevant government authorities to intervene immediately, investigate the price increases, and retract the decision on liberalization.

HAFFA highlights that the logistics sector is a vital pillar of Hong Kong’s economy and that inappropriate fee adjustments can have profound negative impacts on the overall economy. The organization will continue to closely monitor developments and does not rule out taking further action to defend the legitimate rights of freight forwarders and the people of Hong Kong.

www.haffa.com.hk