Airfreight still high amid sea routes disruption

Exporters from Bangladesh continue to face soaring airfreight, which has more than doubled compared to eight months ago, primarily due to disruptions along the traditional Red Sea shipping route. 

Industry insiders said airfreight for cargo from Dhaka to Europe has surged to $6-$6.5 per kilogramme, a sharp increase from $2 in last December. 

Similarly, shipments to the US now cost $7.5-$8$7.5-$8 per kilo, compared to $3 during the same period last year.

"Airfreight surged by up to 150% last April following the Red Sea crisis and have remained high as the issue is yet to be resolved," Nasir Ahmed Khan, director of the Bangladesh Freight Forwarders Association (BFFA), told TBS. 

Capacity strain at Dhaka airport

Nasir Ahmed also highlighted the limited capacity of Dhaka airport, which is insufficient to meet current demand and leads airlines to charge higher rates. As a result, many traders are opting to export cargo through Delhi instead to reduce costs.

Commenting on the recent drop in demand, he added, "We are nearing the end of the order cycle for the year, which is why demand is decreasing. This week, we expect charges to ease slightly."

According to the BFFA, daily cargo handling capacity of the Dhaka airport has increased to 500-600 tonnes, up from 150-250 tonnes eight months ago.

The BFFA also noted that the country's demand for air cargo stands at 1,000-1,200 tonnes per day, but the current capacity falls short, reaching less than half of this requirement.

Global freight trends 

The latest figures from data provider WorldACD show that overall airfreight rates were up 14% year on year in mid-September, led by a 24% increase from Asia Pacific and 56% from the Middle East and South Asia (MESA), reports Aircargonews on Friday. 

The increases in the MESA region have been led by Bangladesh, India and Dubai "bolstered by the disruptions to ocean freight supply chains caused by the attacks on shipping in the Red Sea", read the report. 

"Although average spot rates from India to Europe have fallen back to around $3.30 per kilo in recent months from their highs of more than $4 in April, spot rates from Bangladesh to Europe continue to rise, exceeding $5 per kilo for the last three weeks, as political unrest and logistics disruptions continue to affect this key textile export nation," WorldACD said.

Rates from Bangladesh to the US have increased even more sharply, reaching $7.49 per kilogram in mid-September—more than three times the rate from the same time last year.

Shifting to alternative routes 

In response to the high costs, Bangladeshi exporters and their international buyers, in the past some months, have increasingly turned to Delhi's Indira Gandhi International Airport for airfreight as a cost-saving alternative. 

The airport's capacity gap has also forced major sea freight companies to avoid the Red Sea and Suez Canal since late March due to security concerns linked to Houthi attacks, opting for longer routes around Africa instead.