Efficient cargo handling is crucial for export-driven economies like Bangladesh. Air transport plays a significant role in logistics management, accounting for 6.20 per cent of exports. Due to the short seasonal cycles in the global fashion industry, apparel buyers increasingly rely on air transport to ensure products are shipped within the stipulated time frame. This mode of transport is also vital for sectors such as agriculture and other perishable goods, where timely delivery is essential.
With an increasing demand for exports, particularly in sectors such as textiles, garments, and agricultural products, the nation faces several logistical challenges that hamper smooth cargo operations. These challenges include issues with Explosive Detection Machines (EDMs), fluctuating air freight prices, and shortages in essential equipment such as pallets, containers, and crates. Addressing these challenges is essential for ensuring timely and efficient movement of goods, safeguarding security, and maintaining competitiveness in the global market. The following existing logistics are hindering the uninterrupted flow of export trade by air.
INSUFFICIENT WAREHOUSE FACILITIES: The two warehouses designated for import and export at Hazrat Shahjalal International Airport are significantly inadequate to meet the needs of both exporters and importers. This persistent issue prevents exporters from storing their products in compliance with international standards. Moreover, the internal facilities are highly substandard, affecting both the staff and workers and the proper storage and preservation of consignments.
OPERATIONAL PROBLEMS — EXPLOSIVE DETECTION SCANNER (EDSS):
RA3: Radiation-Based Enhanced Sensitivity, machines are equipped with more sensitive detectors and can detect a wider range of explosives, including those with low densities or that are concealed in complex packaging. These machines are often required for specific cargo, such as agricultural products, to meet international standards and regulations. RA3 is required for the consignment destined to the European Union (EU) and the United Kingdom (UK). Currently, one EDM out of four is in function in the HSIA, Dhaka. The inefficiencies in the airport’s security procedures, specifically the lack of X-ray scanners and EDS facility, are hindering the export of goods to the EU and UK.
Non-RA3: These machines are less sensitive than RA3 machines and may not be able to detect certain types of explosives. They are generally used for screening general luggage and cargo. However, the technology used in these machines in Bangladesh is often outdated, leading to slow and inefficient screening processes. Moreover, frequent technical malfunctions and machine downtime cause delays in cargo clearance, leading to bottlenecks at airports and seaports. This inefficiency impacts the turnaround time for exports and increases operational costs for exporters. This leads to delays, increased costs, and reduced airline operations. Due to the lack of EDS, air cargo carriers must first transport goods to their hubs or Dubai airport for scanning before exporting them to Europe. This detour adds to the shipping cost, causing some major airlines to stop operating cargo flights at Shahjalal International Airport. Bangladesh Freight Forwarders Association (BAFFA) has already expressed their concern saying that it is utterly impossible to meet the requirements of freight forwarders with only one operational EDS.
Inadequate training and manpower: Biman Bangladesh is the only ground-handling agent at Shahjalal International Airport. It lacks skilled manpower and needed infrastructure, such as cargo-handling equipment, warehouse space, facilities for handling perishable and temperature-sensitive cargo, and appropriate scanning equipment. In addition, there is a shortage of skilled technicians to maintain and repair these machines, leading to longer downtimes when issues arise. This gap in human resources hampers the overall efficiency of cargo handling, potentially leading to security risks as well.
Incremental pressure on cargo handling at the airport: According to a report by the Bangladesh Freight Forwarders Association (BAFFA), the airport handled 10,410 tons of cargo in December 2023. However, due to increasing demand and the need to meet the lead times of buyers, particularly apparel exporters, more goods are being shipped by air. As a result, 14,451 tons, 18,700 tons, and 19,127 tons were exported by air in January, February, and March 2024, respectively. BAFFA also reported that the daily demand for air cargo ranges between 1,000 and 1,200 tons.
Impact of air spot price fluctuations: Due to the air spot price fluctuation, exporters are experiencing financial loss which ultimately affects export earnings negatively. Fluctuations in air freight prices disproportionately affect small and medium-sized exporters in Bangladesh. These businesses typically have limited cash flow and depend on consistent logistics costs to manage their operations. A sudden spike in air freight rates may force them to delay shipments or pass on increased costs to buyers, risking loss of contracts.
Shortage of essential equipment: Pallets are a critical component in cargo handling, ensuring safe transportation and storage of goods. Authorities often claim that the shortage of pallets leads to delays in cargo loading and unloading processes. The shortage of containers has been a persistent problem for exporters. With the growing global demand for containerised shipping, there is a significant gap between supply and demand in Bangladesh. This shortage leads to delayed shipments, congestion at ports, and increased costs for exporters as they often need to pay premium rates for available containers. Like pallets and containers, crates are also in short supply, particularly for agricultural and perishable goods. Absence of sufficient crates results in poor packaging, increasing the risk of product damage during transportation. This lack of proper packaging further reduces the competitiveness of Bangladeshi exports, particularly in international markets where quality standards are high.
WAY FORWARD:
Modernising explosive detection machines: To address the inefficiencies of EDSs, the government and private sector should invest in modernised equipment that can detect explosives more quickly and accurately. Additionally, a structured training programme for EDM operators and technicians should be introduced to ensure better handling and maintenance of these machines.
Stabilising air freight prices: The ministry of commerce may take the initiative to convene a meeting with airlines operating in Bangladesh, including Biman Bangladesh Airlines, to address the impact of fluctuating airfreight spot prices. In the long term, Bangladesh could explore expanding its national cargo fleet to reduce reliance on foreign air carriers, providing exporters with more stable and predictable shipping costs.
Addressing the shortage of equipment: Investing in the local production and recycling of pallets can reduce the shortage. Increasing container availability can be achieved by negotiating with international container leasing companies to establish a stronger presence in Bangladesh. Additionally, investing in domestic container manufacturing could help alleviate the shortage. For agricultural exports, developing public-private partnerships to produce reusable crates and improve packaging technology would ensure safe and efficient handling of perishable goods. In the meantime, the Bangladesh Civil Aviation Authority has decided to increase the number of crates and has already secured 376 additional crates to address the current shortage of this equipment.
Include the challenges in the National Logistics Development Policy 2024: To facilitate trade and ease business operations, the National Logistics Development Policy is in its final stage. The issues faced by exporters and importers can be effectively addressed in the policy to streamline international business.
Chattagram and Sylhet AirPort can be used for Air shipment: Due to insufficient facilities such as warehouses, cargo villages, and equipment shortages, improving cargo handling at Chattogram and Sylhet airports is essential. Enhancing air shipment efficiency in these airports will better meet the demands of exporters
CONCLUDING REMARKS: The challenges in cargo handling for export in Bangladesh, particularly those related to explosive detection machines, air spot price volatility, and equipment shortages present significant hurdles to efficient export operations. However, these challenges can be overcome with strategic investments in technology, training, and infrastructure. Long-term competitiveness of Bangladesh’s export sector hinges on addressing these issues promptly.
Abu Mukhles Alamgir Hossain is Director, Export Promotion Bureau (EPB).
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