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What are fuel and security surcharges, and why do you charge them?

Fuel levy: This surcharge is standard throughout the industry, and was introduced at a time when domestic fuel prices experienced extreme fluctuations. To safeguard against similar extreme courier rates fluctuations which would negatively have affected clients' day to day business operations and planning, a fuel levy was introduced to act as a cost stabilizer. Although fluctuations in the fuel price are not always that extreme these days, the levy still acts as a stabilizer to allow for rates increases annually, rather than more often.

Most courier companies calculate a percentage of the value of the waybill as their fuel surcharge, or in some instances do not even disclose such a levy upfront. The fuel surcharge is determined by the local fuel price, and depending on the status of the fuel price for the month, is adjusted up or down on the first Wednesday of each month.

Security surcharge: You may be aware that couriers have been operating in accordance with Part 108 of the Airline Security Regulations since mid-2009. Amongst other measures, it involves a screening and handling process that all cargo must undergo with each and every airline before carriage of such goods can take place. Implementing and maintaining the required security measures that this additional regulation demanded, resulted in huge financial injections in the courier and freight industries globally. A security surcharge was introduced in the industry to offset these costs.

Added to this is the requirement for all courier companies to qualify for 'Known Shipper' status in accordance with the Civil Aviation Authority of South Africa. The Known Shipper security program has been adopted globally, and effectively eliminates the anonymous shipment of all on both passenger and cargo-only flights.