Export Thru Shahjalal Airport: Too costly for businesses | The Daily Star
12:00 AM, November 30, 2019 / LAST MODIFIED: 08:31 AM, November 30, 2019

Export Thru Shahjalal Airport: Too costly for businesses

Many exporters opting for Kolkata, Colombo airports to save time, money

Last month, Monir Hossain, a garment factory owner, missed a deadline for exporting T-shirts to his UK buyer through the seaways. 

So the only option he was left with was to send the shipment by air.

Initially, Monir, whose main export destination is the United Kingdom, wanted to send the consignment -- weighing around 5,000kgs -- through the Hazrat Shahjalal International Airport (HSIA) in Dhaka, but then he opted for the less costly route via Kolkata. 

“It saved me at least 30 cents [Tk 25.50] per kg and a precious day,” he told The Daily Star recently.

Monir is not alone. Many other 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.

Insiders say the exporters, on average, can save up to five hours if they use the Indian airport.

The new Indian route was opened last year for shipment of only garment items due to space constraints in HSIA’s RA3 area, a secured place at the cargo village from where the goods are loaded onto the planes.

Usually, the cost of sending a kg of apparel from the Dhaka airport through direct flight to the destination in Europe is $2.0 to $2.20 per kg, said Syed Md Bakhtiar, director (in-charge, Port and Customs, Dhaka) of Bangladesh Freight Forwarders Association (BAFFA).

On top of that, forwarders have to pay 8 cents per kg to Biman Bangladesh Airlines as terminal handling charge and 6 cents per kg to the Civil Aviation Authority of Bangladesh (Caab) as different security scanning charges.

Besides, Caab charges 2 cents per kg as semi-automation charge from export cargos, according to the BAFFA.

“These rates are too high and Dhaka is more expensive than Singapore,“ Bakhtiar said, adding the Dhaka airport is probably the world’s second most expensive airport for cargo transport.

“Kolkata is cheap. It costs four cents as terminal handling and security scanning charges.”

He, however, refused to comment on the undocumented charge of around 4 cents per kg, popularly known as “speed money” allegedly paid for smooth handling of cargo at the Dhaka airport.

Officials said it was possible to save 25 percent of the total cost if the goods were sent through the Kolkata airport.

Even after paying the charges, sometimes the goods have to be handled by the freight forwarders as the services are poor at the Dhaka airport, he added.

Biman Bangladesh Airlines is the authorised body to handle cargo at the airport, but logistic support like infrastructure and other facilities are provided by the Caab.

Bakhtiar said the cargo village at the HSIA was so small that sometimes the goods are left unattended under the open sky.

“As a result, incidents of frequent theft also take place and quality of goods stored to be exported also deteriorates,” he said. 

Exporters send nearly 2,500 tonnes of dry garment cargo a month through this route, he said, adding that the quantity increases during peak season.

The HSIA handled 3,60,171 tonnes of cargos in the 2018-19 fiscal year, of which export cargo was 2,30,264 tonnes, according to a Caab report that shows an upward trend of cargo handling over the last seven years.

Talking to The Daily Star, aviation expert Kazi Wahidul Alam said, “We do not have a proper cargo village at the HSIA in a true sense. The infrastructure at the cargo areas is also poor and outdated. Besides, every year the demand for air cargo has been increasing by 20 percent, but the space has not.”

There is a lack of adequate facilities to preserve sensitive items like medicines, he added.

Asif Ibrahim, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the organisation which has the highest users of air cargo facilities, said, “At present, the cargo handling facilities at the Shahjalal airport are not up to the international standard. The trade facilitation capacity is inadequate. Often, one can see imported raw materials kept in the open.

“BGMEA has been advocating for improvement of the infrastructure and shorter lead time for clearing consignments. However, whatever little improvements have taken place, those have always been on an ad-hoc basis.”

The government has taken an ambitious plan to upgrade the facilities at HSIA, but it will take a long time to be implemented, he said.

Ibrahim also said the West Bengal government 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.

Speed was of utmost importance to exporters and if Bangladeshi exporters can save time using the Kolkata airport, then it is an option worth exploring, he said.

“We talk about LDC graduation and becoming a middle-income country, but our main international airport and cargo village needs to reflect our ambitions.”

The Kolkata route, while viable, is still picking up pace.

Expo Freight Limited is the sole body that handles garment cargos from Bangladesh through Kolkata’s Netaji Subhas Chandra Bose International Airport.

Its Managing Director Mahbubul Anam, who is also the president of the BAFFA, said they handle 40 tonnes of garment cargo through the new route every day, while more than 500 tonnes of garment items are sent through HSIA.

He said they launched air transhipment of apparel items in December last year. The goods are sent mainly from Dhaka and its adjacent areas to the Benapole land port at night for completing the customs procedures. Afterwards, the goods are sent in trucks to the Kolkata airport from where planes carry the products to their European destinations, he added.

Mahbubul Anam said it was possible to save 25 percent cost if the goods were sent through the Kolkata airport. “For instance, if goods are carried by any airline from Dhaka, it costs around $2.20 per kg but the same goods costs $1.50 per kg from the Kolkata airport,” he said.

Contacted, a top Biman official, wishing anonymity, said they had already decided to reduce the charges at the airport.

“But it will hardly benefit the businessmen if Caab does not reduce its various charges on aircraft for landing and using the airport,” he added. 

He also said that some businessmen are airlifting their goods through the Colombo airport after a short sea freight from Chattogram, adding that the Colombo route would be cheaper than that of Kolkata.

A top Caab official admitted that cargo transport charges through HSIA were high and that the airport lacked adequate infrastructure and facilities.

“We are working to reduce the charges,” said Caab Chairman Air Vice Marshal M Mafidur Rahman. He also said that Caab’s departments concerned were working to lower the charges.

About the inadequate space and infrastructure facilities at the existing cargo village, the Caab boss said they would construct a new cargo area with all types of facilities and the work was underway in that regard.

In the meantime, they are trying to expedite the cargo facilities through installing necessary equipment, he added.

The CAAB chief also said they have taken the initiative to operate cargo flight from Chattogram and Sylhet to reduce the pressure on HSIA.

Currently nine scheduled and four non-scheduled airline careers are operating 51 flights from the HSIA every week.

A Biman official said sometimes some non-scheduled flights also carry goods, especially of Chinese airlines, as per the demand and supply.

Responding to written queries from The Daily Star, Biman said the size of the cargo village for export goods is 1,98,000 square feet and the RA3 area under it is 60,500 sqft of which fenced an area of 40,500 square feet.

“But in the peak time it is not adequate as per the requirement. It needs to be expanded,” the Biman letter said.

“The expansion is needed also as the demand has increased over the years.”

The 1,58,000 sqft Biman Cargo Terminal, where the incoming cargoes are stored, should also be expanded as well, as quantity of both incoming and outgoing cargos increased manifold at the HSIA, it said.

Biman earned Tk 905.56 crore from cargo handling in the 2018-19 fiscal year, the amount was Tk 643.03crore in the previous fiscal and Tk 523.26 crore in 2016-17.

Biman, which has no dedicated cargo plane, handled 27,737 tonnes outgoing and 1,564 tonnes incoming cargos in 2018-19 fiscal years by its own careers. The rest was handled by other airline careers.

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