News / Cargo airlines see opportunities as tariffs rip into India's apparel trade

© Woravit Vijitpanya

Cargo airlines seem to have spotted an opportunity to grab additional apparel trade volumes out of Bangladesh as neighbouring rival India faces serious disadvantages from US tariffs.

Bangladesh and Vietnam — India’s main rivals in Asia, after China — have a clear edge in the US market with their reciprocal tariffs capped at 20%, against the 50% for Indian goods.

Hong Kong Air Cargo has now joined industry peers in seizing on potential sourcing shifts towards Bangladesh.

This month, the carrier will offer a twice-weekly service between Dhaka and Hong Kong on a fixed schedule, with departures from Dhaka every Tuesday and Saturday.

“The additional flights will strengthen connectivity between the two cities, consolidate Hong Kong Air Cargo’s presence in South Asia and provide customers with greater capacity and more flexible cargo flight options,” the all-cargo airline said.

Hong Kong Airport (HKIA) is one of the busiest cargo hubs in the world, thus providing Bangladeshi shippers with easier and quicker transhipment options to major demand markets.

According to available data, HK Air Cargo operates a fleet of 14 A330-200Fs on a global network that includes scheduled connections between New Delhi and Hong Kong.

Last month, Lufthansa Cargo and Indian carrier IndiGo formed a strategic alliance to offer freighter capacity from Dhaka to Los Angeles via transhipment over Ho Chi Min City.  IndiGo’s freight arm, CarGo, is using one of its converted A321 freighters for the purpose.

Indian logistics industry stakeholders agree that greater export signals from Bangladesh are driving a reconfiguration of air freight networks in the region.

“The expansion of air cargo capacity out of Bangladesh reflects a broader shift in global supply chains,” Jitendra Srivastava, CEO of Mumbai-based Triton Logistics & Maritime, told The Loadstar.

“Over time, this will strengthen Bangladesh’s role as a regional logistics hub,” he added.

Amar More, CEO of Mumbai-based Kale Logistics Solutions, believes Bangladesh’s resurgent export surges would “sweeten the pot” for regional logistics service providers.

Bangladesh’s perennial ocean capacity strains, aggravated in recent months by congestion at Chittagong port, are also believed to be forcing some shippers to convert their exports to air freight.

Meanwhile, Indian apparel industry stakeholders fear the higher US tariffs could prove a death knell for exporters unless the government steps in with immediate support.

“Our industry is already experiencing the effects of the tariff hike, with potential losses and order cancellations,” said Sudhir Sekhri, chairman of the Apparel Export Promotion Council.

Many US retail giants have reportedly paused shipments from India due to wide tariff gaps with other markets in the region.

That concern adds to lingering demand alarms for Indian exporters.   Its RMG exports by value have significantly moderated in recent months – up just 1.2% in June and up 4.7% in July, year on year, after soaring in double-digit percentages in the previous two months, data show.