Garment exports find a workaround after India ends transhipment

• Garment exports steady despite India route halt
• Exporters shift shipments via Colombo, Dubai
• Sylhet, Dhaka airports boost screening capacity
• Lower handling charges ease exporters' logistics

Garment exports to Europe have remained largely unaffected by India's suspension of transhipment through its airports, as Bangladeshi exporters adapt by using alternative routes and improved facilities at home.

Exporters said that since India halted the transhipment facility in April this year, most of them now send goods by sea from Chattogram port to Colombo in Sri Lanka. When shipments face tight schedules, consignments are then flown from Dubai after arriving from Colombo.

Otherwise, large vessels carry goods directly from Colombo to their destinations.

Bangladeshi exporters usually use Singapore port and Penang port in Malaysia, where smaller vessels from Chattogram feed mother ships.

After the suspension of the transhipment in April, the government installed an explosive detection system (EDS) at Osmani International Airport in Sylhet to screen cargo bound for Europe.

Besides, all four EDS machines at Hazrat Shahjalal International Airport (HSIA) in Dhaka have been repaired.

Moreover, ground-handling charges for export cargo have been reduced by five to six cents per kilogramme at both airports.

Shovon Islam, managing director of apparel exporter Sparrow Group, said pressure on Dhaka airport had eased since the EDS was installed in Sylhet.

"Some major international clothing retailers and brands such as Inditex are now carrying the goods with their chartered planes from Sylhet or sometimes from the airport in Dhaka," he said.

Faisal Samad, director at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said this was currently a lean season for air shipments, as many buyers were transporting goods by sea.

"So, space on cargo flights is not an issue at the moment," he said, adding that a large volume of garments bound for Europe and the United States is now shipped via Colombo, with some airlifted from Dubai when deadlines are tight.

Before the suspension, exporters transported their goods to India through Benapole by trucks, from where they were flown out of Kolkata and Delhi airports.

The route was used by local exporters due to a shortage of screening facilities in Dhaka and reduced cargo space after several airlines cut flights from HSIA.

Between January and March this year, about 34,900 tonnes of garments worth $462 million were shipped to 36 countries through Indian airports, according to BGMEA.

Exporters estimate that goods worth around $2 billion were sent through India annually before the suspension.

Kabir Ahmed, immediate past president of the Bangladesh Freight Forwarders Association (BAFFA), said screening facilities had improved at both Dhaka and Sylhet airports following the transhipment suspension.

"At HSIA, three of the four EDS machines are usually in operation, and explosive detection dogs are also deployed. Exporters have no complaints about screening delays at Dhaka or Sylhet airport," he said.

After the reduction of ground-handling charges, airliners now charge about $2.80 per kilogramme from Sylhet to European destinations. In peak months such as November and December, rates rise to between $3.80 and $4.00 per kilogramme from Dhaka, according to Ahmed.

By comparison, Indian routes cost between $2.10 and $2.20 per kilogramme, plus an additional 15 to 20 cents per kilogramme for transport through Benapole, he said.

On average, 450 tonnes of dry cargo are shipped daily from Dhaka and Sylhet airports in the off-season, increasing to about 1,200 tonnes during peak periods.

A European buyer who sources billions of dollars worth of garments from Bangladesh said air shipment facilities had "improved a lot because of alternative routes such as Sylhet and Chattogram airports".

He credited the government's quick installation of new screening systems for the progress.

Air Commodore Abu Sayeed Mehboob Khan, member (Operations and Planning) of the Civil Aviation Authority of Bangladesh (CAAB), said the authority had proposed cutting screening charges for Europe-bound cargo from eight cents to six cents, a reduction of around 25 per cent.

Group Captain S M Ragib Samad, executive director of HSIA, said cargo flights are kept out of any restrictions to facilitate the country's export.

"In November and December, we will take extra measures to ensure smooth operations during the peak season," he said.

At Sylhet's Osmani International Airport, three dry cargo consignments were handled in August, said its director Mohammad Hafiz Ahmed.

He said the airport now has a storage capacity of 100 tonnes and is ready to expand operations if demand increases.

Although top CAAB officials had earlier said the third terminal at Dhaka airport would open by December, that now seems unlikely.

Civil Aviation Adviser Sk Bashir Uddin said the government was ready to approach other international operators if the Japanese consortium declined to take over management of the new terminal.