Thursday, August 27, 2009

Chinese Air Freight Carriers Hike Fuel Prices

Concern for domestic logistics companies
Shipping News Feature

CHINA – The three major Chinese airfreight carriers Air China, China Eastern and China Southern today raised their fuel price for domestic freight carriage by almost $44 per tonne. This after China raised retail prices of fuel on 30th June before dropping them again one month later after the price of crude oil decreased.

Analysts say the latest increase is due to the global crude price reaching its recent 10 month high. They predict that the extra revenue will ease the plight of the three companies but logistics firms will bear the brunt with some serious effects.

There have been complaints of mismanagement as the Government tends to react very quickly to the fluctuating market with guidelines of automatic price changes whenever the market price of crude alters by more than 4% in any 22 day period. Street prices of fuel in Beijing are around 20% higher than the US average yet the tax free price is generally slightly lower and there are concerns this applies to aviation fuels as well.