Fuel on a rocket: airlines boost cargo surcharges as prices soar, industry sees costs shift shipments to ground.(Transportation: Air & Expedited)

Jet fuel prices are surging to new records, racing up even faster than gasoline prices and triggering a new round of fuel surcharge increases just as the air cargo business is looking more fragile.

Lufthansa Cargo, Northwest Airlines and Cargolux led a group of airlines hiking their fuel surcharges this month.

Earlier, FedEx raised it air surcharge from 10.5 to 12.5 percent and DHL hiked its added charge from 12.5 to 14.5 percent. UPS kept its air surcharge locked in at 9.5 percent, the top rate it can charge under the pricing plan it put in place in January.

The increases came as one influential furl price index used by carriers showed jet fuel costs were soaring to nearly $2 a gallon in August.

The Lufthansa fuel index hit a record 361 Aug. 19, up 63 percent since the start of the year and nearly double what it was in August 2003. A 100 in the Lufthansa index equals 53.4 cents per gallon, which means the carrier was paying almost $1.93 a gallon.

Air Transport Association figures released this month showed the airlines paid an average of more than $1.57 a gallon for jet fuel in June. That was a 45.7 percent increase over the same month last year and just short of April's record $1.58 per gallon price.

Some international airlines are reporting the fuel costs are cutting into their financial returns and there are growing signs that they are hitting the bottom line in cargo departments as customers are hit by changing shipping economics.