KUALA LUMPUR: The Airfreight Forwarders Association of Malaysia (AFAM) has called for air cargo fuel surcharge (FSC) adjustments by domestic airlines to be linked to recognised fuel price indices or a transparent benchmark, similar to practices followed by international carriers.
The association made the suggestion as its members have observed disparities in fuel surcharge rates across domestic cargo routes, particularly on sectors connecting connecting Peninsular Malaysia with Sabah and Sarawak.
“Introducing greater transparency through a recognised benchmark or index-linked mechanism would help ensure FSC remain a fair cost-recovery component within the logistics supply chain, while providing fair and greater predictability for businesses that rely on air cargo services across Malaysia,” it said in a statement on Tuesday.
AFAM noted that while international airlines generally apply FSC based on recognised global fuel price indices, the domestic market appears to apply FSC levels without a clearly defined benchmark or reference mechanism.
“Freight forwarders play a key role in facilitating Malaysia’s domestic and international trade by connecting airlines, exporters, and importers. Unpredictable surcharges can complicate logistics planning and make it difficult for businesses to manage transportation costs effectively,” it said.
The call follows concerns raised by AFAM over significant differences in FSC levels imposed by domestic airlines operating within Malaysia’s air cargo sector.
The association said FSC differences occur despite airlines operating under the same fuel market conditions and airport infrastructure.
AFAM emphasised that the industry is not opposed to legitimate fuel cost recovery by airlines but believes that fuel surcharge adjustments should ideally be linked to recognised fuel price indices or a transparent benchmark.
“Such mechanisms are typically tied to recognised benchmarks such as the IATA Jet Fuel Price Monitor or the Singapore Jet Fuel Index, ensuring that surcharge adjustments remain transparent and aligned with actual fuel cost movements,” it said.
AFAM’s Chairman, Thomas Mathew, said the association supports legitimate cost recovery by airlines but stated that the current situation highlights the need for greater transparency.
He said fuel surcharges should ideally reflect actual movements in global aviation fuel prices and follow a transparent benchmark.
“Without a clearly defined reference mechanism, there is a risk that such surcharges could become inconsistent across the market, which ultimately affects the cost of doing business for Malaysian companies,” he added. – BERNAMA
