Airfreight rates soar in Bangladesh, exports delayed – exporters hit hard & airlines cash in
Airfreight rates from Bangladesh to major western destinations have surged in just two weeks due to a backlog of export cargo at Dhaka, the country’s main airfreight gateway. In the third week of July, student-led protests caused chaos, resulting in the government imposing curfews and an internet shutdown, preventing around 3,000 tonnes of exports from leaving.
Once the internet was restored on 24 July, businesses rushed to send export boxes to airports and seaports, causing a shortage of space and leading to a spike in freight rates. Exporters are now accusing carriers of taking advantage of the situation by increasing rates by up to $1.50 per kg to various destinations. For example, airlines are charging $7.50 per kg to transport cargo to the US, up from around $6 in early July, and close to $6 per kg to Europe from a previous rate of $5.20.
Nasir Ahmed Khan, VP of the Bangladesh Freight Forwarders Association, expressed concern that the higher airfreight rates could prompt exporters to avoid Dhaka Airport in the future. Despite the delays, airlines have not deployed any freighters at Dhaka to help clear the backlog, continuing to rely on passenger planes and their bellyholds to export cargo.
One exporter noted that despite the increased demand, airlines are not deploying freighters, indicating they are trying to capitalize on the situation. On a positive note, Bangladesh has recently received phytosanitary certification to export fresh mangoes to China, a market that spent $18 billion on imported fruit last year. This certification is expected to open up a significant market for Bangladeshi mangoes and help diversify the country’s export portfolio.
In 2022, Bangladesh exported 1,757 tonnes of mangoes, but this increased by 73% to 3,045 tonnes last year due to sales in ten new markets. The addition of China to the list of export destinations is likely to further boost mango exports from Bangladesh this year.
