RMG exporters race against time amid sea, air freight congestions, fare hike

Bangladeshi apparel exporters are grappling with multiple challenges in dispatching their products, even by costly air freights, as their lead times are dwindling due to disruptions in production and shipments caused by the internet blackout and curfew.

Businesses say both air and sea transport are facing similar challenges due to excessive container congestion, and they are unable to meet lead times despite some buyers extending deadlines by up to seven days.

Industry insiders also said airfreight costs per kilogramme of cargo from Dhaka to Europe have risen to $6, an increase from $2 just five months ago. Similarly, airfreight expenses for shipments to the US have surged to $7.50-$8 per kilogram, compared to the $3 rate recorded in December.

They said Dhaka airport is already overloaded due to massive cargo volumes, with some goods having to be stored outside the cargo area because of a lack of available cargo flights.

Sheikh HM Mustafiz, managing director at Cute Dress Industry, told The Business Standard, "The factory is facing challenges in getting a small consignment sent by their Canadian buyer released from Dhaka airport. The parcel arrived on 27 June, and the garment products, after having price tickets applied, were scheduled to be shipped to the buyer by 20 July."

He said the buyer is now pressing to have the goods sent as soon as possible.

"According to our conversation with the Canadian buyer, they might grant a two-week extension," he said. "Otherwise, we will have to face costly air shipments."

Echoing Mustafiz, Shovon Islam, managing director at Sparrow Group, said, "I visited Dhaka airport to get my goods released, which have been stacked there for the past 15 days.

"I saw a large number of goods piled up in the cargo area of Hazrat Shahjalal International Airport, with a long line of trucks waiting."

He added that the recent strike by clearing and forwarding (C&F) agents disrupted airport activities, and airlines also suspended operations during the curfew.

He told TBS that export goods are now taking seven days to be shipped from Dhaka airport, and inbound goods take at least 15 days to be released. As a result, goods are now piling up in open spaces and even on the roads.

Kabir Ahmed, president of the Bangladesh Freight Forwarders Association, said the accumulation of goods is due to multiple factors, including a lack of space in the cargo area and a shortage of cargo airlines.

He also noted that apparel manufacturers have been under immense pressure since late December to ensure the timely delivery of goods.

Kabir said the export cargo load at Dhaka airport increased significantly following the quota reform movement. Additionally, the airport's cargo handling capacity has been strained, with air freighters – such as Turkish, Emirates, Qatar, and Saudia – reducing their cargo operations in Bangladesh.

"In the absence of dedicated cargo flights, we often find ourselves relying on passenger flights," he added.

Speaking in the same note, Arshad Jamal, managing director of Tusuka Group, said despite paying higher costs than through India, arranging flights from Dhaka is very difficult.

To meet buyers' lead times, the group has sent 80,000 pieces of garments to Europe via air freight at their own expenses, amounting to Tk3.20 crore, he added.

A leading airline operator said the situation at Dhaka airport is worsening, as they faced challenges parking their aircraft yesterday.

Exports through India on the rise 

Amid this situation, many exporters are compelled to use Indian airports for shipments, said Kabir Ahmed.

"The volume of Bangladeshi goods transported through Indian airports has risen significantly, reaching about 14,000 tonnes by June this year," he added.

This is up from 150 to 200 tonnes per month previously, Ahmed said.

He also noted that two chartered planes are scheduled to start operations from Dhaka this month, which will help support apparel exporters. The situation may improve after the third terminal at Dhaka airport, scheduled to open by June next year, begins operations.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said Micro Fiber Group, a leading apparel exporter, recently shipped their goods to Dubai via sea transport and then used air transport from there to meet the lead time. "Given the container congestion at Chattogram port and Dhaka airport, the exporter chose this route," he added.

Airfreight costs from Dhaka  

Kabir Ahmed said Indian airlines can offer rates that are at least $1 lower than those from Bangladesh, which is the main reason for the increase in air shipments through Indian airports.

However, he added, it also requires an additional 1,600km of road transport to reach Indian airports.

Why airfreight costs higher from Dhaka  

An exporter, speaking on the condition of anonymity, said Biman charges 18 cents per kilogramme for handling, while the charge is 11 cents from India. Kabir Ahmed added that airlines also charge an additional 4-5 cents, bringing the total to 24-25 cents.

In contrast, airfreight costs from Bangladesh are approximately $6 per kilogramme, whereas from India, they range from $3 to $4 per kilogramme, depending on the destination in the EU.

The exporter noted that Indian air cargo agents save up to $1 per kilogramme, despite the additional handling required for transiting from Benapole to Kolkata, New Delhi, and Mumbai.

The internet blackout began on 18 July and was partially restored more than five days later. The curfew was imposed on the night of 19 July and remains in place with some relaxations amid the student movement against discrimination, which has resulted in around 200 deaths.