Home ›› 13 Oct 2021 ›› Opinion
Logistic plays a significant role in global value chain. Air Cargo service makes a significant contribution to the competitiveness of the international trade. Air lift accounts for less than 1.0 per cent of world trade tonnage, and about 35 per cent of the world’s trade value is carried by air (Boeing World Air Cargo Forecast 2016-2017).
Air freight from Bangladesh has been suffering from an unprecedented backlog for the past few weeks. Hazrat Shahjalal International Airport (HSIA) is struggling to handle the mounting pressure of air cargos as buyers of international apparel brands are
now keen to take their goods by air to avoid congestion at transshipment ports with growing demand at their home markets.
The airport is now handling 1.5 times more cargo than its capacity. Still, the huge number of consignments are overwhelming the airport capacity, airport sources said. Bangladesh is lacking deep sea port and mother vessels are unable to come to Bangladesh and all consignment need transshipment through any nearby ports in other countries. The recent congestion in Chattogram port and also other trans-shipment port like Singapore are the reasons of airlift of export consignments in the recent time.
The problem aggravated due to lack of scanners and weighing scales, ongoing construction works of the third terminal and insufficient storage space at its cargo village etc. Moreover, freight forwarder leaders are saying the Hazrat Shahjalal International Airport has lost its handling capacity due to the absence of scheduled flights, failure in the explosive detection system (EDS) and ongoing construction work of the third terminal. It is the peak time for apparel export but an explosive detection system (EDS) machine has been out of order for a long time, another one has to be shut down after a period of work. But explosive detection scanning is mandatory for export to the European Union countries. Considering the sufferings, The Japan International Cooperation Agency donated two scanners to the airport authorities but their validation process has not been completed yet by the EU officials.
Many scheduled chartered flights have been stopped during the pandemic and later some forwarders brought new chartered flights which were not enough to carry this extra load. In the absence of scheduled flights, exporters have become almost fully dependent on freighter aircraft, which are not operating regularly in the country. Bangladesh should now double the number of flights to handle the extra pressure.
The handling of cargo at Cargo Village lacks modern handling facilities. It is not having adequate equipment to load and unload the consignments. Sometimes flights go under load due to lack of equipment. Sometimes, scheduled flights are being missed for not being able to handover shipment to airlines on time is happening. Airlines are going under capacity for not receiving shipments timely from forwarders. It is not possible to get another booking promptly and at same rates once shipment misses booked flight. Sometimes, waiting period to get another booking exceeds 8-10 days.
On the other hand, the cargo shipping charge has increased reportedly up to 400 per cent depending on destination. In response to increased demand and backlog, airlines have increased rates, in fact, are increasing daily. Even at those prices waiting for uplift has reached 10-15 days, defeating the purpose of making an air shipment. Same time, handling costs of shipment has increased manifold, an average of $ 0.50 cents per kilogram from previous $ 0, 05 per kilogram.
Biman is the only authorized body to handle cargo at the airport, but logistic support like infrastructure and other facilities are provided by the CAAB. Biman charges extra 15 per cent royalty which is un-precedent in any other country.
A study of Japan International Cooperation Agency (JICA) find that around 40 per cent of imported goods lay under open sky due to shortage of space at cargo complex at Dhaka Airport. It is the violation of Bond license and also concern of exporter and buyers.
In addition to the poor and expensive cargo handling services and due to shortage of space at cargo village, the trucks are unable to offload the cargo carrying from factory to airport remain in waiting at outside the cargo village for three to five days. Exporters are struggling to bring shipments from factory and warehouses as truck
drivers are unwilling to come to airport despite high transportation and idle hours costs, just due too long turnaround times.
The crisis at Dhaka Airport compelled the exporters to find alternate route of delivery of their garments to buyers in west. The alternate ports are Kolkata and Colombo. Many garment exporters have started sending their cargo through the Kolkata and Colombo Airports to save money and time, amid high handling charges and a lack of adequate space facilities at the Dhaka airport. The cargos are transported to Benapole land port where Indian tracks are transporting to Kolkata Airport. This is a new window of opportunity for India to gain from Export of Bangladesh only because Dhaka airport is less competitive than regional airports and overburdened with export service. This transshipment through Kolkata and Colombo airport indicate how expensive the service of Hazrat Shahjalal International Airport is. These two airports service is competitive even after payment of carrying the consignments from Bangladesh to India and Sri Lanka. Even after the multimodal delivery, the Colombo route would be cheaper than that of Kolkata.
It has been reported that the service in Hazrat Shahjalal International Airport is more expensive than Singapore. and The Freight forwarding Agents’ association (BAFFA) presume that the Dhaka airport is probably the world’s second most expensive airport for cargo transport.
NBR is reportedly considering to allow private international container Depot (ICD) also known as off-dock or air freight station. At present, Internal Container Depot (ICD) or off-dock is a facility under which private sector operators are allowed to stuffing and un-stuffing export-import containers at outside of the port area. Currently, there are a number of ICDs under Chattogram Customs House which mainly deals with export containers along with some ‘low risk’ import items having low duty rate.
Our neighbours are ahead of us. The provincial government of West Bengal and the Airport Authorities of India had constructed an international standard airport in Kolkata and would soon set up an express courier terminal there. The operations of the terminal will be outsourced to ensure efficient handing of inbound and outbound cargos and courier services.
In Hazrat Shahjalal International Airport Airport, Biman is only one service provider and charging royalty charges from each consignment. Authority should stop their authoritative approaches of royalty for export consignments. The service should be open for private investment to give better and efficient services.
Bangladesh should allow off-dock service as early as possible. Government should also allow Off-dock warehouse services inside the economic zones, revenue security, assessment process, types of goods to be allowed to be handled at off-docks.
All the measures to make the airport competitive in the regional market. Bangladesh has no alternate to be competitive in order to survive the global market. The giant trade association like BGMEA and BKMEA may use their influence over the policy makers to reform the logistic services in order to make air lift competitive in the global market.
The writer is a legal economist. He can be contacted at [email protected]
