AIR FREIGHT
FINANCE
¥en trend
The Japanese Government
has been providing soft
loans to developing
Asian nations for their air
freight industry through
its development assistance
arm JICA (the Japanese
International Co-operation
Agency). This invaluable
financial provision has been
aimed at air logistics-related
issues, with Bangladesh
becoming the latest country to
benefit from this largesse.
Bangladesh
JICA signed an
agreement with the Bangladesh
Government at Dhaka’s Hazrat
Shahjalal International airport
in terms of its Expansion
Project, in June 2017. The
total loan amount was put at
¥76.8bn (US$689.3m), with the
lowest annual interest rate of 0.70% and a repayment period of
30 years. The project is to construct third terminal at the airport,
including a new cargo village, with a 41,200 square metre cargo
terminal to resolve the current cargo handling issues.
Bangladesh is well-known as a home to the textile and apparel
industry, which has thrived on its low cost human resources. Some
800 tonnes of goods are air shipped every day via the airport. Of
this total, about 70% comprises garment products, mainly bound
to the EU and Asia. Exporters are forced to use the trans-shipment
facility as the airport authority is not able to manage the air cargo
handling challenges.
However, the airport authorities have faced criticism from the
Bangladesh Knitwear Manufacturers and Exporters Association
and the Bangladesh Freight Forwarders Association as the firstever
bonded cargo from Bangladesh flew out of Kolkata airport,
India, in late 2018. Md. Hatem, First Vice President, BKMEA said:
“Sending freight via Kolkata is very risky and not feasible for our
exporters at all. First of all, the products will go through by road –
which is a big hassle – and from there, air trans-shipment. Not all
the leading airlines have flight schedules in Kolkata, but which are
available in Delhi or Mumbai. So, goods have to be double transshipped
to Delhi or Mumbai again from Kolkata.” He added that
such a routing does not save time for the garment manufacturers.
The lack of a skilled workforce, scarcity of equipment and space
and security concerns still plague the cargo village of the country’s
key airport. One of the main downsides of the station is that of
simply not having enough shaded space in the cargo area; in
consequence, goods are left haphazardly in the open.
For Tajikistan, JICA granted aid for
the construction of a brand new cargo
terminal at Dushanbe International
The JICA project aims
to overcome those troubles
in one fell swoop. After the
construction of a new cargo
terminal, annual handling
capacity is set to increase
to 500,000 tonnes from the
current 200,000 tonnes figure,
according to the Civil Aviation
Authority of Bangladesh (the
CAAB).
JICA’s study team has
optimistically forecast
air cargo demand at the
station. According to the
team’s analysis, CAGR for
international cargo in a best
case scenario is predicted to be
7.41% for the period 2015-
2035, with domestic cargo
hitting 11.3%. In a lower
case prediction, JICA assumes
international cargo demand
to hit 387,953 tonnes and
domestic cargo to be 3,174
tonnes by 2020.
In June 2018, the CAAB
signed contracts with four
consultancy firms: Japan’s
Nippon Koei Company,
Oriental Consultants,
Singapore-based CPG
Consultants and Bangladesh
Development Design
Consultants, for some ¥4.6bn
(US$41.3m). The consultancy
10 June 2019 www.airlogisticsinternational.com
vchalup /stock.adobe.com
Japan has
been investing
in emerging
markets, writes
Mainbayar
Badarch.
/www.airlogisticsinternational.com
/stock.adobe.com
/www.airlogisticsinternational.com
/stock.adobe.com