Dhaka airport fire: Businesses fear over $1b impact on imports, exports
Impacts include both direct and indirect ones
Though the exact extent of direct damage from the fire at Hazrat Shahjalal International Airport's air cargo complex in Dhaka is yet to be determined, traders fear that the incident could have an impact of over $1 billion on the country's import and export activities.
Kabir Ahmed Khan, president of the International Air Express Association of Bangladesh, told The Business Standard, "It's too early to estimate the direct losses. But the overall impact – both direct and indirect – on imports and exports could exceed $1 billion."
Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and a ready-made garment exporter, echoed the same concern.
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"We fear export losses could cross $1 billion," he told TBS.
He said the losses include not only direct damage but also order cancellations due to delays in receiving raw materials, the need to ship by air at several times the normal cost, discounts forced by buyers, and the failure to confirm orders when samples do not arrive on time.
Apart from garments, the cargo village warehouses also hold raw materials for pharmaceuticals, agriculture, and other commercial importers.
Ehsan, who also had accessories stored in the cargo area, said more than 500 garment exporters had small consignments there. "The value of individual items may be low, but collectively they represent exports worth millions of dollars," he said.
"For example, I may have lost accessories worth only $2,000, but that could stall exports worth around $200,000. These items are imported by air because they're urgently needed. If they're destroyed, re-importing them will take time – and I may have to ship by air again, which costs half the product's value. Otherwise, the buyer might demand a 50% discount. Small businesses can't recover from such losses."
Md Shehab Udduza Chowdhury, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed similar fears.
Officials from the International Air Express Association of Bangladesh said that about one-third of all import and export goods in air cargo belong to the apparel and textile sector. More than 60 international air courier services currently operate in Bangladesh.
The BGMEA said garment manufacturers are now assessing how many consignments and how much value were affected.
Mahmud Hasan Khan Babu, president of BGMEA, told TBS, "On Saturday we emailed all our members, asking them to report what goods they had stored in air cargo."
He said it was still too early to quantify the losses. He himself had imported accessories and machinery in the cargo area, but as of last evening, he didn't know whether his consignments were safe or burned. "If those shipments don't arrive on time, I could face heavy export losses," he said.
Emran Ahmed, managing director of Zemtex Linkage Industries Ltd, an export-oriented garment manufacturer, told TBS, "I had about 40 kg of lace accessories imported from India stored at the cargo village. My C&F agent told me there's a 98% chance they were burned. The fire started in the courier section, where my goods were."
"I had imported the accessories by air to meet an urgent shipment worth $162,000 in exports. That shipment will probably be cancelled, as I had already failed to meet the export date on the 30th," he said.
Last year, Bangladesh's garment exports amounted to nearly $40 billion.
The cargo village is mainly used for importing lightweight machinery and electronics, and for exporting and importing small quantities of garments, samples, accessories, documents, and parcels.
According to media reports, a representative of a pharmaceutical company said $75,000 worth of chemical ingredients had been destroyed.
"I tried to clear the goods on Thursday but couldn't. They were scheduled for release on Sunday – but everything's gone now," he said.
