News / New air cargo link-up boosts frustrated sub-continent RMG shippers

Photo: IndiGo

Bangladesh’s high-stakes apparel export trade, hobbled by Indian cross-border trade restrictions, seems to have found some supply chain respite.

Lufthansa Cargo and India’s IndiGo airline-operated CarGo have linked up to provide significant freighter capacity from Dhaka to Los Angeles in a transhipment arrangement over Vietnam’s Ho Chi Minh City.

The combined service began last week – IndiGo deploying one of the three converted A321 freighters in its fleet – from Dhaka via Kolkata to Ho Chi Minh City. Then, “freight bound for America will be transported on our Ho Chi Minh (SGN) to Los Angeles (LAX) freighter” added Lufthansa Cargo, describing the  service as a “unique arrangement.”

The German-flag carrier said Bangladesh shippers would be able to booking shipments from Dhaka to LAX via CarGo, while it keeps its own booking channels out of SGN open.

For IndiGo, the partnership seems to be in sync with its long-term strategy of extending its freight arm reach to larger long-haul markets to target higher cargo tonnage.

“IndiGo aims to capture growth in both domestic and international markets while mitigating risks posed by tariff volatility,” CarGo COO Mark Sutch told The Loadstar.

India’s largest private airline also anticipates significant belly capacity gains from the addition of new wide-body aircraft on the back of a recent deal with Airbus to acquire 30 A350s, with deliveries scheduled to begin from 2027.  This investment complemented a damp lease pact with Norse Atlantic Airways for four B789-9s for the immediate term.

Transit delays and high logistics costs have hit Bangladesh’s economic lifeline ready-made garment (RMG) industry verticals. In a serious trade blow, New Delhi this year abruptly revoked transhipment access for Bangladesh RMG exports to third countries due to strained bilateral relations between the two nations.

New Delhi Air Cargo Complex was already a busy hub point for Bangladesh shipments, leaving Indian shippers frustrated over capacity shortages. As a result, Bangladesh shippers have been searching for alternative supply chain solutions to keep their cargo moving, especially to the US, amid lingering tariff-linked concerns.

Meanwhile, reflecting the tariff fiasco impact, Indian RMG exports have also slowed. June volumes by value were up just 1.2% year on year, sharply dropping from the double-digit growth percentages reported for the prior two months, according to available data.

India’s RMG shippers have now embarked on a global outreach programme to push exports, with Japan as one major target market.

However, industry sources in Tirupur, India’s textile manufacturing hub near Chennai, remain bullish.

“We are highly optimistic about the demand outlook,” KM Subramanian, president of the Tirupur Exporters’ Association, told The Loadstar. “The cluster is building more production capacity as we believe ultimate tariff levels will favour India.”