News / Bangladesh air cargo rates triple as conflict chokes key hubs

Air freight rates in Bangladesh have rocketed as the crisis in the Middle East sees capacity tighten and demand rise.

Since the war in the Middle East began, air freight rates from Bangladesh to Europe have tripled, while those to the US have nearly doubled, following widespread disruption to flights to Middle East hubs, which normally handle the majority of the country’s air cargo.

Hundreds of these flights have been cancelled, creating a severe shortage of capacity and pushing up demand for remaining routes.

Typically, about 60% of Bangladesh air cargo is sent using Middle Eastern hubs, but flights to those destinations are now almost entirely suspended. As a result, airlines operating routes to the US and Europe that avoid the Middle East have increased their freight charges, including Turkish Airlines, Malaysian Airlines, Thai Airways, Cathay Pacific and Singapore Airlines.

Europe receives around 56% of air cargo from Bangladesh, while about 22% goes to the US.

Before the war began, airlines were charging around $2 per kg to European destinations, rates that have climbed to as much as $6 per kg as demand rises amid the capacity crunch. Rates to the US have also increased, from about $4.50 per kg to around $7 now.

Major carriers such as Emirates, Etihad, Flydubai, Air Arabia, Qatar Airways, Gulf Air and Saudia Airlines are all based in the Middle East, where flights have remained suspended for days. There are also no direct flights between Bangladesh and the US or Europe.

Nasir Ahmed Khan, a former director of the Bangladesh Freight Forwarders Association, said Biman Bangladesh Airlines – the national flag-carrier that carries a significant amount of air cargo in aircraft bellies – had also suspended flights to various Middle Eastern destinations since the war broke out, worsening the capacity shortage.

According to Mr Khan, some 367 flights from Bangladesh, mainly to the Middle East, had been cancelled since 28 February, preventing any cargo from being shipped.

“The high rates will continue until the war situation normalises and cargo pressure lessens,” he added.

The Middle East crisis is also threatening disruption to inland logistics. As Bangladesh’s stock of fuel oil dries up because of the war, government-run oil importing companies have cut fuel supplies to off-dock container depots by around 25%, which could disrupt operations and the movement of containers between Chittagong port and the off docks.

Vehicles transporting containers and equipment operating inside the depots rely on diesel fuel to function.

The Bangladesh Inland Container Depot Association (BICDA) warned that operations could be disrupted within days unless full fuel oil supplies were restored.

In a letter to the Bangladesh Petroleum Corp on Monday, BICDA urged quick resumption of full fuel supply, particularly to safeguard exports. Depots under BICDA handle all outbound cargo and about 25% of Bangladesh’s import cargo.

Meanwhile, ships transporting bulk cargo from mother vessels through river routes across the country, as well as marine fishing vessels, are also facing fuel shortages, and have already seen serious disruption to their operations.