In pursuit of the exodus of manufacturing from China, freighter operators have trained their sights on several growing economies in Southeast Asia. Vietnam, Cambodia and Bangladesh have all seen a surge in garment production, causing a need for more lift. However, Bangladesh is in danger of losing out in the race, owing to security concerns over Dhaka’s Hazrat Shahjalal International Airport, the country’s chief international gateway for air cargo.

Government agencies of several large trading partners have expressed concerns about security issues at the airport and indicated that this could jeopardize air service between their countries and Bangladesh.

In mid-January, the British government formally asked its counterpart in Dhaka to tighten security measures at the airport, describing the current state of security as vulnerable. The UK asked for a sustainable action plan from Dhaka to guarantee ensuring proper security measures. Without such steps, “complexities regarding continuation of Dhaka-London direct flight might arise,” the British authorities warned.

A British delegation visited Dhaka in November to inspect the security regime at the airport. Although the authorities in Bangladesh declared in late October that security measures at Hazrat Shajalal had been beefed up, the British inspection team found that there were security lapses. Allegedly they also warned Bangladeshi officials that failure to improve the situation could possibly lead to the suspension of Dhaka-London flights.

On the passenger side, the inspectors criticized a lack of proper screening procedures during the boarding process and found that tagging equipment was not functional. They also found security lapses in cargo handling and asked for all private freight forwarding agents to be removed from the hangar area.

US officials struck a similar note only days after the formal British warning. After a delegation of US anti-terrorist specialists visited the airport, the US informed the government of Bangladesh that a resumption of direct Dhaka-New York flights would be difficult without tighter security measures at Hazrat Shajalal.

Security concerns over the airport have already dented Bangladeshi exports to Australia. Following the report of the British inspection team the Australian government tightened rules on air cargo imports from the Asian country. Since late December a ban is in place in Australia on all cargo imports in excess of 500 grams that originated in, or transited through a number of countries – among them Syria, Egypt, Somalia, Yemen and Bangladesh.

The administration in Dhaka has announced the establishment of a task force to beef up security measures. It has also installed new explosives-tracing machines and implemented several security measures.

A lasting impact on air freight capacity to major markets would undermine the competitive position of Bangladesh vis-à-vis regional rivals like Cambodia, which has seen a sharp increase in garment exports.

Cathay Pacific, which mounted Boeing 747 freighter flights to Phnom Penh last year, has seen double-digit growth in its cargo business in Cambodia, with export tonnage surging 50% over the previous year’s level, while revenue climbed 28%.

The main destinations for Cambodian exports are Japan, Hong Kong, Los Angeles and Italy. Exports are dominated by finished garments, noted Mark Sutch, the airline’s general manager of cargo sales and marketing.

“The long-term prospect is positive, as new factories are setting up for the production of electronic parts,” he added.

Keree Chaichanavong, managing director of Thai cargo agent Trans Air Cargo, is also bullish on Cambodia.

“Cambodia is really coming up well,” he said, pointing to strong growth in the garment business there. Attracted by lower labour and land costs, garment manufacturers from Thailand have moved into the neighbouring country, he added.

According to Chaichanavong, many companies truck their output from Cambodia to Bangkok or Ho Chi Minh City for uplift. This suggests more potential demand for lift out of Cambodia. If concerns over Bangladesh were to prompt more producers to look to alternatives, Phnom Penh could see further air freight capacity enter.

By Ian Putzger

Air Freight Correspondent | Toronto