News / Soaring airfreight rates see Dhaka cargo being moved via China

© Andrii Yalanskyi

Bangladeshi freight forwarders have started sending air cargo to the US west coast via China, as elevated airfreight rates elsewhere mean this is more cost-effective than using Middle East hubs.

As well as soaring rates out of Dhaka, forwarders have reported hubs in the Middle East as congested in recent weeks, particularly as regional tensions increase and airlines were forced to cancel flights.

Last month, Expo Freight, one of Bangladesh’s biggest forwarders, sent 100 tonnes of cargo to the US via China, and Wax Logistics and APS Logistics have also sent goods on this route.

Wenwen Zhang, air freight analyst at Xeneta, told The Loadstar: “The outbound Bangladesh air cargo market is highly prone to market disturbance, as over 70% of cargo volume is procured in the spot market.

“In the week ending 22 September, spot rates from Bangladesh to Europe surged to $5.34 per kg, the highest level in over two and a half years, and nearing the pandemic peak of $5.71 in late November 2021. The dynamic load factor also remained elevated, at 96%, in the same week.

“For the return leg, spot rates reached $2.25 per kg. Although this marks an increase from the recent low in late July, it remains below the early June rate of $2.90.

“Spot rates from Bangladesh to the US rose to $7.83 per kg, their highest point in over two years.”

Mahbubul Anam, MD of Expo Freight, explained: “I was not getting the required space to carry goods through the traditional routes, so thus explored a new avenue.

“The Chinese route is cheaper than the Middle Eastern route. We can save around $1 per kg by using Chinese airports to transit cargo.”

He added: “Cargo space on Chinese airlines from Dhaka is adequately available, thus the route can be a viable alternative for transhipment.”

Poor infrastructure in Dhaka has also been blamed for the route changes. Nasir Ahmed Khan, VP of the Bangladesh Freight Forwarders Association, explained that forwarders had “been forced to look for alternatives”, following problems with the scanners at Dhaka, as well as congestion in the Middle East. Dhaka Airport’s average daily exports are some 700 to 800 tonnes.

India is also becoming more popular as a transhipment point for US and EU-bound cargo from Bangladesh, with goods trucked to Delhi and flown from there.

And it’s not just airfreight: forwarders are now also using sea-air routes, with vessels to China and flights onto the US or Europe.

Air cargo capacity growth this year-to-date from Asia Pacific to North America is up 16% over last year, while to Europe it is up 19%, according to Rotate data. Capacity to Europe last week was 21% higher than a year earlier, and 13% higher to North America.