Fuel surcharges that domestic export corporations pay when sending cargo by air are being raised again. As jet fuel prices have risen due to the war between the United States and Israel on one side and Iran on the other, they jumped sharply last month, and the upward trend appears to be continuing this month.
Because food, pharmaceuticals, and information technology (IT) products such as semiconductors are mainly shipped as air cargo, corporations that export related products are expected to face an even heavier freight burden.
According to the airline industry on the 8th, major domestic carriers that operate freighters, including Korean Air Lines, will raise cargo fuel surcharges by about 3% from the same period a month earlier, effective on the 16th.
Korean Air Lines set the air cargo fuel surcharge effective on the 16th at 2,020–2,260 won per kilogram. That is about 3.1% higher than last month's 1,960–2,190 won.
Korean Air Lines also raised its air cargo fuel surcharge by an average of 493.9% from the previous month last month, and has increased it again as jet fuel prices continue to climb.
According to Korean Air Lines, last month's Singapore jet fuel spot price (MOPS) was $4.772 per gallon, up 2.6% from the previous month.
Asiana Airlines and AIRZETA Co. also raised air cargo fuel surcharges by a similar margin. Asiana Airlines set the surcharge effective on the 16th at 2,020–2,260 won per kilogram, an average increase of 3.1% from the previous month.
AIRZETA Co., which acquired the air freighter institutional sector from Asiana Airlines, also set its air cargo fuel surcharge for the same period at 1,980–2,220 won per kilogram. That is about a 3.1% increase from the previous month.
Both Asiana Airlines and AIRZETA Co. raised their air cargo fuel surcharges last month by an average of 326% and 334%, respectively, from the previous month, but decided on another increase as jet fuel prices remained elevated. The two companies' air cargo fuel surcharges for this month are more than 510% higher than the same period a year earlier.
These carriers' air cargo fuel surcharges were only at the 330–370 won level as recently as February, just before the war broke out between the United States and Israel on one side and Iran on the other. Even looking at last year's average, they were at the 390–450 won level.
Air cargo fuel surcharges are set in proportion to distance and weight. For distance, rates are divided into three tiers: short-haul, medium-haul, and long-haul.
Short-haul routes include Japan and cities in eastern China with an average flight time within two hours. Medium-haul routes include Asian and Oceania countries excluding India and Australia/New Zealand, and long-haul routes include Europe, North America, Australia, and India.
Because of this, corporations that export products to the Americas and Europe by freighter face an even greater burden. For example, when exporting 1 ton (t) of products to the Americas or Europe via a Korean Air Lines freighter, the fuel surcharge in March was only 510,000 won, but from the 16th it will be 2,260,000 won.
Semiconductors account for the largest share of export air cargo. As a result, semiconductor manufacturers such as Samsung Electronics and SK hynix are facing higher freight costs.
In its first-quarter conference call, Samsung Electronics said, "Rising oil prices due to the Middle East war are affecting increases in global ocean and air logistics costs," and noted, "Freight rate increase risks are expanding."
Export companies are therefore seeking ways to minimize rising logistics costs by using medium- to long-term partnerships with major logistics firms or alternative modes of transport.