HSIA needs off-doc warehouse https://businesspostbd.com/post/31899

M S Siddiqui

13 Oct 2021 00:46:47 | Update: 13 Oct 2021 00:46:47

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 mssiddiqui2035@gmail.com