Bangladesh's garment shipment to Europe has expedited with the introduction of transshipment facility from Kolkata's Netaji International Airport on a pilot basis, exporters said.
Last week, the first-ever bonded cargo from Bangladesh flew out of Kolkata airport. The cargo, weighing 4.1 tonnes, was carried by Bangladeshi trucks to the Benapole land port, where it was loaded on to Indian trucks. The Indian trucks carried the goods to the Kolkata airport.
“This is like opening up a new window for us,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The development comes as part of a renewed bilateral trade framework between the two neighbouring nations following government-led panel discussions between the two sides in New Delhi at the end of October.
Transshipment, which is the shipment of goods or containers to an intermediate destination for delivery to final destination through another mode of transport, will shorten the long lead time by a few days. Moreover, the cost of carrying goods will reduce significantly.
The programme will be run on a pilot basis for six months to gain experience to come up with regulation to check cargo diversion.
The first cross-border and land-to-air transshipment from Bangladesh was run by Expo Freight.
“Primarily, we are sending three cargo flights a week. Our target is to introduce six flights per week,” said Maria Rahman, head of key accounts management team of Expo Freight.
The logistics provider has already sent seven flights of cargo after the launch of new operations from the Kolkata airport.
About the charge, Maria said if it costs Tk 5 for carrying a kg of goods by an airline to Europe from Bangladesh, the Dhaka-Kolkata-Europe route will cost Tk 3.5 a kg.
It takes three to five days to reach the final destinations in Europe from Dhaka, she added.
Emirates and Qatar Airways are currently carrying garment items from the Kolkata airport to Europe.
“Primarily our targeted markets are Europe. But we have plans to send apparel cargos to the US if our routes become commercially viable,” she added.
The initiative is commercially viable and cost-effective, said Arvind Aggarwal, senior manager for business development of Celebi Delhi Cargo Terminal Management India, the cargo management company in Indira Gandhi International Airport.
“We are lobbying with the governments of both Bangladesh and India for introducing truck services between Dhaka and Delhi to carry goods to be sent Europe from the Indira Gandhi International Airport.”
Once the Bangladesh-Bhutan-India-Nepal (BBIN) motor vehicles agreement comes into effect fully, the movement of goods by trucks would be easier between the two countries, he said.
At the Dhaka airport, every day more than 1,000 tonnes of goods, mostly garment items, are stored for air shipment, but airlines can carry 700 tonnes, exporters said.
The lead time on exports from Dhaka is higher than some of the country's competitors because of geographical location, according to the BGMEA president. Plus, it takes more time to release goods from the main airport in Dhaka.
Exporters say the rush of goods at the Dhaka airport is so high that goods are left unattended at the cargo village.
Usually, air shipments are made mainly to reduce the lead time, but when exporters opt for that mode of transport they are left with hardly any profit. “Air shipment is very expensive,” Rahman said.
But sometimes exporters have to use the air route to ship goods on schedule. In many cases, buyers carry the cost of air shipments, allowing exporters to make some profit from the sales, the BGMEA chief also said.
It costs between 30 cents and 40 cents or even less for carrying a kg of apparel items from the Chittagong port to any port in Europe.