With a view to ensuring a quicker shipment of finished apparel goods to European Union, Bangladesh has introduced transshipment from Kolkata’s Netaji International Airport from the beginning of the new year.
In its logic for using India’s airport, Expo Freight, who are dealing with cross-border and land-to-air transshipment, claimed that the transshipment will reduce the long lead time comparing to Bangladesh. They also claimed that it would cut shipment cost also.
However, most of the business people, trade analysts and economists did not welcome it. Rather, they have come up with a mixed reaction as it would create dependency on other countries for the shipment and may make local ports reluctant in case of shortage of goods to ship.
In addition, it will tarnish Bangladesh image to global buyers.
Air shipment does not happen on regular basis. It is an emergency and expensive mean to send finished apparel goods in case of exporters failure of on-time delivery through seaports to meet the lead time.
It costs an apparel maker more as the manufacturer has to bear the expenses of air shipment, which is bore by the buyers normally.
How air-shipment is done
In the first-ever bonded cargo from Bangladesh using Kolkata airport has shipped apparel goods weighing 4.1 tons to European Union.
The apparel goods were first carried by Bangladeshi trucks to the Benapole land port, then it was loaded on to Indian trucks. The Indian trucks carried the goods to the Kolkata Netaji Subhas Chandra Bose International Airport from where it was sent to European Union.
Emirates and Qatar Airways are currently carrying garment items from the Kolkata airport to Europe.
The transshipment is an initiative of government bilateral relation with its friend and neighboring country India. It was tabled during a discussion between the two sides in New Delhi at the end of October.
During the piloting shipment, there will be three cargo flights in a week, which would be gradually increased based on the success of the operation.
According to sector people, there are about 1,000 tons to shippable goods every day at Dhaka’s Hazrat Shahjalal International Airport, of which 90% is from the apparel sector, but with the present capacity, it can carry over 700 tons of goods. It costs $0.30 to $0.80 to ship a kg goods through the air, which is bore by the manufacturers in most of the cases.
Usually, buyers bear the cost of shipping through seaport but when there is a delay due to the failure of a manufacturer, the buyers ask to send through airfreight to meet the lead time and the makers have to pay for it.
Trade leader hopes for better
Apparel sector people think it will help the sector to send goods quickly.
“It is a new option for the exporters, which would make the shipment quicker,” Md Siddiqur Rahman, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said the Textile Today.
He argued that our lead time is higher than our competitors in the global market. So it would be helpful for us, he added.
Will tarnish country’s image
“Sending finished apparel goods using an airport of another country means Bangladesh doesn’t have the capacity to handle or send goods on time from its own airports,” former Finance Advisor to Bangladesh caretaker government AB Mirza Azizul Islam said the Textile Today.
It will tarnish Bangladesh’s image to the global buyers and business community, which may hit the country’s ranking and capacity to facilitate business, said the economist.
Instead of transshipment, the government should come up with new investments and strategy to improve service quality by developing infrastructure and by training employees, said the former bureaucrat.
Private sector investment can be an alternative, if needed more fund beyond the government capacity, he added.
“Air shipment through India might be quicker but it would not be viable due to the security of goods and tarnish the image of the country and dampening the buyer’s confidence,” said another exporter of apparel goods.
In long run, Bangladesh will lose business as the buyers may find it difficult to relay on the third party involvement as a weak point, said the exporter.
Bangladesh to lose business
Meanwhile, stakeholders opined that it will make the sector more inefficient as it will lose business and hinder new investments in improving service quality.
“As an organization, we are trying to improve our service quality and hope to deliver goods within a shorter time. While the authority is trying heart and soul to make the management efficient,” seeking anonymity an official Civil Aviation Authority of Bangladesh of said the Textile Today.
Sending finished apparel goods using an airport of another country means Bangladesh doesn’t have the capacity to handle or send goods on time from its own airports.
He also said that the shifting foreign airport will hit the earnings and it may cast an adverse impact on us, he added.
How to improve airport capacity
On top of that, exporters opined that it is not a proper initiative and the situation is not so bad to rely on other to ship goods through airports of other countries.
“In handling air shipment, Bangladesh may be a little bit slow, it is too early to use airport of other countries, seeking anonymity, an apparel exporter said the Textile Today.
In removing the barriers to ensure smoother air shipment and quick delivery of goods, the government should improve the infrastructure facilities at air and sea ports as top priorities to increase its efficiency and capacity, said the businessman.
Also Read: Bangladeshi bonded cargo departs from Kolkata airport
As of now, exporters face a delay in shipment and cannot avail enough space at airports, while export goods are kept in open space, he claimed.
The management of the airport has to ensure that export goods will get proper treatment and would not be demanded due to lack of proper maintenance, he added.
It is said that the new route will help to reduce cost and time but the exporters are not agreed rather they think it may be riskier the as there is a possibility of damage during shipment from Bangladesh to India, said the sector people.