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Air Freight Rates that are Frighteningly High

Small and Medium-Sized Manufacturers in Indonesia Over-Burdened by 300%+ Increase in Air Cargo Rates in only 4 Months

The Indonesian Association of Express Delivery and Logistic Companies (Asperindo) is complaining that a recent increase in air cargo rates will impact negatively on small and medium-sized enterprises.

As reported by NusaBali, the chairman of Asperindo, Mohamed Feriadi said that air cargo rates have been increased several times since October 2018 until January 2019 the amount of that increase exceeds 300%. Speaking on Wednesday, February 6, 2019, Feriadi added: “Whatever the increase, it is always passed on to the user. The users – largely comprised of small and medium-sized enterprises – are now increasingly using air cargo to deliver their merchandise to the market place. These businesses are telling Asperindo that this cost is very burdensome.”

Citing one example, Feriadi pointed to Garuda Indonesia that has implemented cargo rate increases in June, twice in October and November in 2019. Another increase was undertaken twice in January 2019. The total value of these increases exceeds 300%.

Business are now complaining that in some cases the cost of shipping an item actually exceed the value of the item being shipped.

Asperindo also complains that there is a lack of advance warning from the airlines before cargo rates are increased complicating supply contracts entered into between manufactures and their customers that specifically stipulate minimum warning times before implementing any price increases.

Because of steep increases implemented with little warning, some business are changing their means of shipment from air cargo to overland means of shipment.