Fallout worries exporters

SM Jahangir Hossain exports five to 10 tonnes of perishable goods to different countries every week, particularly the UK.

All was well for him until the recent UK ban on direct cargo from Dhaka to London.

The UK Department of Transport says, “Recent security assessments of Dhaka International Airport found that some international security requirements were not being met.”

As part of a set of interim measures, it adds, cargo will not be allowed on direct flights from Dhaka to the UK until further notice.

“Airlines carrying cargo between Bangladesh and the UK on indirect routes are being asked to ensure it is re-screened before its final leg into the UK.”

Jahangir, managing director of Jinnah Enterprise that exports fruits and vegetables, is a regular customer of Biman Bangladesh Airlines. He is now deeply worried as the UK decision means longer time for transportation of perishable goods and additional freight charges.

Bangladesh exports fruits and vegetables worth more than Tk 400 crore to the UK every year. And nearly 40 percent of the total export of vegetables, fruits and allied products a year is for the British market, he said.

“So, it is easy to see how important the British market is for us,” he said, adding, the UK is a ready market for the vegetables and fruit exporters, as a large number of Bangladeshis reside there.

Usually, perishable items like fruits and vegetables were sent to the UK through direct flights within 10 to 11 hours. After the decision, it might take two to four days, he said.

 Jahangir used to pay Tk 182 for sending one kilogramme of vegetables to the UK. “I will have to pay more from now as the air carriers will also re-fix the rate,” he told The Daily Star yesterday, two days after the UK decision came.

Like Jahangir Hossain, exporters from almost all sectors are worried that their businesses will be hit.

Apart from apparel, Bangladesh export items include carrot, tomato, potato, eggplant, spinach, cauliflower, papaya, pumpkin, bottle gourd, cabbage, coriander leaf, ladies finger, cucumber, bitter gourd, bean, jute leaf, drumstick, radish, dry fish, fish and meat. The local companies also export agro-processed packaged food to the UK.

“The exporters will have to depend more on foreign carriers and pay higher charges. There will be a cargo space crisis with the foreign carriers as they are less interested to carry perishable goods,” Jahangir said.

Mahbubul Anam, president of Bangladesh Freight Forwarders Association, said the carrier companies have yet to announce new  prices.

But the transportation cost will go up because the goods, loaded in Dhaka, have to be unloaded in Thailand or Singapore or Dubai or Hong Kong or any other country for re-screening.

The airlines will also charge extra, he said.

Perishable items will face risk of damage because of the longer lead time, he said.

Lead time is the period it takes for products to be delivered after getting the order. Shorter lead time is preferred in export and import of goods.

According to Mahbubul Anam, currently it takes only 10 hours to carry the goods by air from Dhaka to London. But, because of the ban, it will take two to four days to unload the goods in the UK, he said.

“If the ban prolongs, Bangladeshi businesses will suffer a lot as the UK is one of the most important markets for Bangladesh,” he said. Ten percent garment items from Bangladesh are sent to the UK every year, he said.

Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association, too thinks that the British move will cause massive losses in exports as the UK is a big market among the EU nations. It is the second biggest garment  export destination in the EU after Germany.

“More importantly, other EU countries might follow the [UK] decision and that would be even more dangerous for us, as the EU is our largest export bloc,” he said.

“We want the government to settle the issue with the UK as soon as possible,” Siddiqur Rahman told The Daily Star.

Garment makers exchange a lot of samples of designs and finished apparel items everyday with the UK. So they will be dealing with the issue daily, he added.

Bangladesh exported garment items worth $3.23 billion in 2014-15 fiscal year to the UK, registering a 21.28 percent growth from the previous year, according to data from the Export Promotion Bureau.

Kamruzzaman Kamal, marketing director of Pran, a major agro-products exporting company, said the decision will not affect them so much as they ship goods by sea and almost all the products are packaged items.

“But we will face an indirect impact for the bad image of the country,” said Kamal, adding that his company sends agro-products worth $2.5 million a month to the UK.

However, those who export fresh perishable items will face major difficulties, he added.

Earlier, Australia's Department of Infrastructure and Regional Development imposed a ban on air cargo from Bangladesh from December 19 last year.

The ban, which is still in place, has been causing losses in Bangladesh's business with the country. The Bangladesh government is still lobbying to get it removed.

The embargo is on anything heavier than 500g and it will remain in force until further notice.