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