Bangladesh air cargo rates still elevated
30 / 08 / 2024
Photo: Jaromir Chalabala/ Shutterstock
Air cargo rates out of Bangladesh were still elevated in the last full week of August as a range of issues has hit supply chains from the country over the past year.
Data from Xeneta shows that rates from Bangladesh were up 163% year on year in the week ending August 25, with average prices to Europe reaching $4.77 per kg and to North America they stood at $6.91 per kg.
Xeneta airfreight analyst Wenwen Zhang said that rates from the country began to rise in late January as a result of modal shift due to the Red Sea shipping crisis adding weeks to ocean supply chains as vessels were forced to take the longer route around Africa to avoid missile attacks.
Then in August, there were further increases when the country was hit by a wave of protests that resulted in huge delays to transport operations.
One contact told Air Cargo News it was taking around 10 days to export cargo out of the country.
Zhang added that more recently major flooding halted rail and road transportation on the critical route between Chittagong and Dhaka.
The situation has eased in recent weeks but rates remain high.
Source: Xeneta
“This series of adverse events led to outbound Bangladesh air cargo spot rates accelerating at one of the highest paces on record (+163% year-on-year) in the week ending August 25, reaching their highest level in over two-and-a-half years,” said Zhang.
“Bangladesh also holds the record for the highest airfreight rate increase so far in 2024 across all global air corridors.
“More specifically, the air cargo spot rate from Bangladesh to Europe, one of Bangladesh’s major corridors, exceeded its previous Red Sea peak in May by reaching $4.95 per kg in the week ending August 18. The market did ease slightly in the week following the August peak, falling to $4.77 per kg.
“For context, the all-time record freight rate on this corridor was observed during the pandemic when it reached $5.71 per kg in mid-November 2021.
“The spot rate from Bangladesh to North America in the week ending 25 August reached its highest level in over two years, rising to $6.91 per kg. This is an increase of 127% compared to the same week in 2023.”
She added that the cargo load factor for the week ending August 25 stood at 97%.
In response, companies have been trucking volumes into India to utilise air operations in that country.
“Bangladesh will emerge from the civil unrest and flood waters will subside, but there may be a longer term impact if the turmoil of 2024 spooks shippers into shifting supply chains to other regions,” added Zhang.
“Currently, several global fashion brands are reportedly cancelling orders from Bangladesh and shifting them to other garment export markets such as Cambodia and Indonesia in Southeast Asia.”
