Bangladesh manufacturers say additional security measures are hurting exports bound for Europe

Bangladesh manufacturers say additional security measures are hurting exports bound for Europe

Bangladesh's apparel makers have heaved a sigh of relief after the government said it has received new explosives-detecting equipment for Dhaka airport, which the industry hopes will persuade the European Union (EU) to lift a ban on direct flight air cargo.    

Since 1 June, the EU has insisted air cargo from the south Asian nation be screened by a third country before entering EU airspace, citing the absence of bomb-detectors at the Hazrat Shahjalal International Airport (HSIA), the country's main gateway.

The move has sparked a flurry of government procurement activity. "EDS (explosive detection system) and EDD (explosive detector dogs) have just arrived," Rashed Khan Menon, Bangladesh's civil aviation and tourism minister, told just-style.

That said, the installation and roll-out of the new systems and services will take "time," he adds without specifying.

Once installed, the minister hopes that the resulting security improvements will encourage the EU to withdraw the direct flight cargo ban.   

Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the industry lobbyist group, welcomes the government action, predicting it will help persuade the EU to liberalise its restrictions.  

"It's good. The sooner the authority installs the equipment, the better for us," he notes.

He says apparel exporters have been facing problems in shipping merchandise as a result of the June ban, which followed similar decisions by Australia and EU member states Germany and the UK.

Currently, flights carrying Bangladeshi cargo undergo explosives screening at third-country airports, including those in Dubai, Abu Dhabi and Singapore, before reaching the EU destinations.

"Our fares are rising but the shipment of merchandise is getting slower. Third-country inspection takes much time for unloading, screening and reloading cargo," Rahman told just-style.

The BGMEA says costs of air shipments comprising mostly high-value and time-to-market sensitive products have climbed by 20% to 40% owing to the enhanced security measures imposed by the EU.

Also, the requirements have driven up shipping times from two to three days prior to the ban to five to 15 days now.

The bulk of air-borne cargo leaving Dhaka airport constitutes apparel products, with volumes averaging 700 to 800 tonnes a day, according to freight forwarders and exporters.

And securing the withdrawal of restrictions on Bangladesh cargo flights is crucial for the south Asian nation as more than half of its annual clothing merchandise shipments are exported to the EU.

In the 2017 fiscal year, Bangladesh exported goods (of all kinds) worth US$19.35bn to the EU, making up as much as 55.55% of the country's total export receipts value of US$34.83bn.  

And while sales are increasing, growth is sluggish. Textile and clothing shipments to the EU were up 3.49% year-on-year to US$17.75bn in the 2017 financial year ending 30 June, according to the Bangladesh Export Promotion Bureau (EPB), the slowest growth in 15 years.

This slow growth has been partly caused by the German, British and Australian direct cargo bans, which were imposed in 2016 and 2015, say Bangladesh clothing sector executives.

Germany purchased Bangladesh-made garments valued at US$5.13bn in the 2016/17 financial year. The UK imported textiles and clothing worth US$3.3bn that year. And Australia imported readymade garment products worth US$581m from Bangladesh in the same period.