More misery for apparel houses as air freight rates ex-Bangladesh double

Air freight rates out of Bangladesh have doubled in recent months, spiked by a severe capacity crunch due to coronavirus-linked operational suspensions and growing demand.

Shippers are now paying twice pre-pandemic rates for expedited shipments, which they describe as a “big burden in this challenging period”.

To carry goods to European airports, air cargo operators are charging more than $3.65 per kg, compared with $1.80 in March last year, and $6.20/kg to North America, up from $2.85 in last year.

Nearly 40 airlines were carrying cargo from Bangladesh prior to the pandemic, and half of them have suspended flights or drastically reduced frequency.

Apparel remains the top export item out of Bangladesh to the main markets in Europe and America, but the pandemic has severely affected import markets, with lower sales there, even during Christmas.

Bangladeshi apparel makers are thus receiving fewer orders and frequent order suspensions, which also brings down cargo volumes for air shipment.

Before the virus, around 700 tonnes passed through Dhaka’s Hazrat Shahjalal International Airport each day. Now, it is around 400 tonnes, which has forced the freighter operators to decrease flight frequency.

Vice president of Bangladesh Freight Forwarders Association (BAFFA) Syed Md Bakhtiar told The Loadstar most Bangladeshi cargo was carried by Middle Eastern carriers, now mostly using passenger planes with the remainder by freighters.

“Due to the fall in passenger traffic the number of flights has decreased drastically, thus the carriers increased the freight rates to cover losses,” he said, adding that the flight frequency of freighters had decreased by 50%-60% creating the capacity crunch.

Mr Bakhtiar was hopeful of a freight rate decline once air flight capacity and frequency increased after the pandemic situation eases following mass vaccination programmes.

First vice president of the Bangladesh Knitwear Manufacturers and Exporters Association Mohammad Hatem said: “Recently, I had to pay $8-$9 per kg for air shipment of goods, compared with $2.50-$3 before.

“The increased air freight rate is a big burden for apparel makers, as while the pandemic raged, they hardly get any orders that guarantee profit.”

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