The global airline industry is facing increased criticism after announcing large hikes in cargo fuel surcharges, creating concerns that airlines are raising their fuel surcharge for revenue reasons and not just to recover increasing fuel prices.

The logistics sector in Hong Kong is seeking government intervention following the announcement by a number of significant carriers to quadruple their cargo fuel surcharges, which has been described by representatives of the freight industry as excessive and opaque.

Industry representatives state that the recent increases to cargo fuel surcharges significantly exceed the recent rise in oil prices, which have risen in recent weeks due to geopolitical instability in the Middle East and continued disruption of energy supply routes such as the Strait of Hormuz.

Critics have also suggested that the surcharges have increased at a disproportionate rate due to rising oil prices and fall short of being clearly linked to actual fuel price movements. Several freight forwarders have suggested that without reasonably transparent methods of determining the surcharges, the surcharges could be viewed as profit rather than cost recovery.

Passenger airlines face similar issues as air freight carriers for their costs of operations. Rising oil prices have forced passenger airlines globally to increase their ticket prices, with the main reasons provided by passenger air carriers being that the increased cost of jet fuel has been the largest contributor to this .

Far beyond any other cost associated with the airline’s operating costs. While fuel represents 20%-30% of an airline’s overall operating costs, the airline industry must act quickly to combat these significant increases in the price of crude oil.

At the same time, there have also been criticisms of the lack of oversight and regulation surrounding the collection of fuel surcharges. Many believe that airlines are abusing their authority by implementing fuel surcharges without enough standardization or regulation; therefore, creating a major financial burden to both the Shipper as well as their logistics providers.

The logistics industry, therefore, is advocating for greater levels of transparency regarding the fuel surcharges being charged and for them to be clearly defined based on true increases in costs to the airlines versus simply an opportunity to increase revenues.