The second domino falls!

On 12 January, Qatar Airways Cargo announced to its customers that it would abandon base-rate-plus-surcharges pricing, and move to an all-in rate structure.

On New Years Eve, when Emirates announced its move to an all-in rate for cargo, the sentiment in the forwarding and shipping community was “about time!” But after that initial response, the question of whether other carriers would follow Emirates’ move quickly morphed into “Can other carriers afford not to follow.”

The answer came in a letter from Qatar Airways cargo, published on the Inforwarding website, in which the carrier said:

“Qatar Airways Cargo recognizes that current surcharge conventions expose the supply chain to significant price volatility. After careful consideration and following the requests from its customers, the freight forwarders, Qatar Airways Cargo has concluded that, for us, a revision of this principle is necessary.

Therefore, taking a phased approach from April 2015, Qatar Airways Cargo has decided to transition its cargo pricing structure to a one-rate basis. A new commercial rate will replace the existing ++ structure. Qatar Airways Cargo will abolish both its Fuel (MYC) and Security (MOC) surcharges. All other ancillary charges will remain in place.

Qatar Airways Cargo will be maintaining its pricing levels based on its independent assessment of the prevailing supply and demand conditions as well as taking into account its cost base.”

Whether a move by any given carrier to an all-in rate structure will result in lower costs for shippers, or more profit for forwarders, will only be answered with the passage of time. For now, though, it is almost irrelevant, and Cargo Facts expects that we will soon see an avalanche of falling dominos, as carriers scramble to join the “All-in Club” for fear that if they don’t, they will lose business to the carriers that have joined.