Fuel Surcharge

Oil futures continue their downward slide as those cowboys in the pits of the New York Mercantile Exchange’s Chicago and New York operations have decided change tack and move from call to put options. A put option is a bet on the price declining. It is laughable to listen to all those so-called experts telling us it’s all about supply, political instability or the weather that affects the daily price of oil, when the real fact of the matter is traders talk the price up or down thus creating constant spread between the positions they decide to take. Oil companies obviously enjoy the ride too and if the truth is known, they are buying put options themselves right now too! To me, I see no difference between the way the New York Mercantile Exchange operates and how the Gambino and Genovese families operated with their stand over tactics in the good old days of prohibition. In a nutshell the Mafia was a bunch of thugs and quite frankly the way the N.Y.M.E. does business, they are not too much different themselves. The only exception is the RICO act put the mafia behind bars from the eighties onwards. It’s about time the prosecutors started applying the same act to incarcerate those assorted thugs who call themselves traders.

Let’s now see how the airlines start reacting to the 30% decline in the price of a barrel of oil that has taken place over the past three weeks, especially in view of the continuing investigations into their price fixing activities. When will they adopt a more sensible approach of turning the surcharge into a percentage of the rate as opposed to maintaining a per kilo rate? How about applying 50% of the current surcharge into the body of the rate so forwarders can then markup their rates accordingly? It is a nonsense we have destinations where the freight rate is half that (and more) of the fuel surcharge and we are forced to act as a collection agency for these surcharges without being able to be recompensed for the risk of outlaying the money.

It is such a shame we live in a society where politicians are totally immoral and have no guts to stand up for what is right. In fact they act in cahoots with big business, especially Wall Street and the oil companies. Obama tells us to pump up out tires. McCain says we should help the oil companies drill for more oil. Where is this world coming to? On the one hand we can send ex Qantas employee Bruce McCaffrey to jail for six months for “price fixing” and then on the other, we think it is cool a twenty year old oil trader can go out and buy two new Ferraris with his monthly bonus check!

Tags: Economy, Fuel, gas, McCain, Obama, oil