Air freight prices skyrocket! Dhaka goods are being transported from China to the western United States
Bangladesh freight forwarders have started air freight to the West Coast of the United States through China, as rising air freight prices elsewhere mean it is more cost-effective than using Middle Eastern hubs.
In addition to the soaring freight rates from Dhaka, freight forwarders have also reported that hub airports in the Middle East have become overcrowded in recent weeks, especially as regional tensions escalate and airlines are forced to cancel flights.
Last month, Expo Freight, one of the largest freight forwarders in Bangladesh, sent 100 tons of goods to the United States through China, and Wax Logistics and APS Logistics also sent goods on this route.
Xeneta air cargo analyst Wenwen Zhang told The Loadstar: 'The outbound air cargo market in Bangladesh is highly susceptible to market disruption as over 70% of the cargo volume is purchased in the spot market.'.
As of the week ending September 22, the spot freight rate from Bangladesh to Europe surged to $5.34 per kilogram, the highest level in two and a half years and close to the peak of $5.71 in late November 2021. The dynamic load factor also remained at a high level, reaching 96% in the same week.
For the return trip, the spot price reached $2.25 per kilogram. Although this marks an increase from the recent low at the end of July, it is still lower than $2.90 at the beginning of June.
The spot price from Bangladesh to the United States has risen to $7.83 per kilogram, the highest point in over two years
Mahbubul Anam, General Manager of Expo Freight, explained, "I didn't get the space needed to transport goods through traditional routes, so I explored a new approach.
Chinese routes are cheaper than Middle Eastern routes. By using Chinese airports to transfer goods, we can save about $1 per kilogram
He added, "The cargo hold of Chinese airlines departing from Dhaka is sufficient, so this route can be a feasible option for transshipment
The weak infrastructure in Dhaka is also considered a reason for the route change. Nasir Ahmed Khan, Vice President of the Bangladesh Freight Forwarders Association, explained that due to issues with scanners in Dhaka and congestion in the Middle East, freight forwarders are "forced to seek alternative solutions". The daily export volume of Dhaka Airport is approximately 700 to 800 tons.
India has become increasingly popular as a transit point for goods shipped from Bangladesh to the United States and the European Union, with goods being transported by truck to Delhi and then air freighted from there.
Not just air freight: Freight forwarders now also use sea and air routes, flying to China by ship and to the United States or Europe by flight.
Rotate data shows that so far this year, air cargo capacity from the Asia Pacific region to North America has increased by 16% compared to last year, while air cargo capacity to Europe has increased by 19%. Last week, the transportation capacity to Europe increased by 21% compared to the same period last year, while the transportation capacity to North America increased by 13%.