New air freight pricing structures that will commence at the beginning of next month have been announced by Emirates and they are sure to cause a ripple if not a wave throughout the industry as a result. Emirates SkyCargo are turning back the clock in announcing a return to 'all-in pricing' for air cargo to replace their existing base plus surcharges structure, a pricing model that is commonly used across the sector.
Emirates new model will provide the shipper with a single fee based on weight/cube and will be inclusive of any and all surcharges. The new pricing begins on all air freight to and from Europe on February 1 with a global roll out scheduled to commence a month later. It's a bold move by the carrier and may well be influenced by the current falling costs of fuel coupled with their own position at the heart of recent expansion within the global air freight market operating as they do from Dubai in the Middle East.
While the changes will certainly simplify costing and I expect be embraced by most customers it is the reaction of the industry, specifically the competition, that will be most telling to observe during 2015. The fact that the decision has been made by Emirates SkyCargo who rank number three globally for air freight tonnage behind only Fedex and UPS will certainly raise more reaction than if it been made by a lesser light in the global air freight market.
In terms of improving the transparency of carriers it is a fascinating step forward but if the motivation is aimed at building in a more fluid pricing model based on fuel prices the result could be a changing pricing structure that causes just as much confusion as fuel surcharges. We'll definitely be keen to wait and see how others react and whether the response and reaction if any is regional or further afield.
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