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Old 2nd June 2010 | 17:12
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CargoOne
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Joined: Feb 2001
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From: Europe
Cargo rates will just go up and that's it. It could be that some stuff which is currently flown will have to switch to surface transport, but generally speaking 100% rise of fuel price will get cargo rates to rise by 30-40%.

Fuel represents anything between 25 to 40 % of total cost at cargo carriers operating modern equipment (744, MD11 and newer), CV just above 35%, LH less than 30%.

So instead of paying $4 per kilo, shippers will have to pay $5.5. Typical stuff flown longhaul costs over $100 per kilo, if the fuel cost would double, overall commodity price at destination will increase by 0.5-2.0%. Hardly end of the world.

Fuel is not a problem for the industry. The problem is some industry players who dumping the rates in order to get their market share or to get a quick cash. On a macro level, for sure, supply and demand level are important, but this is outside airlines control.
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