Repeated blockades have put the garment sector in a tight corner as exporters are counting losses from order cancellation and rising transport costs.
Buyers are cancelling orders as exporters fail to meet the lead time due to transport crisis, said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Some buyers are also imposing penalties in case of delayed shipment, cutting prices of garment products, he mentioned, adding that transport costs have surged by around 30 percent due to expensive air shipment.
The BGMEA’s research and development team has collected three-day data (December 1-3) from 10 exporters to assess the overall losses caused by the blockade.
Orders worth $3.96 lakh were cancelled during the period, while the exporters spent $3.08 lakh on air shipment.
In the form of penalty for delayed shipment, the exporters saw a price cut by around $1.08 lakh as orders worth $27.70 lakh were delayed.
“We collected the data to show the government and the opposition how we are incurring losses due to blockades,” the BGMEA president said.
The $20-billion export sector has already been hit by a number of recent disasters, including fire and factory building collapse, added Atiqul Islam.
Owners do not operate trucks and covered vans on the Dhaka-Chittagong highway for fear of vandalism and arson.
Fares of covered vans, said the BGMEA chief, surged to Tk45,000 – Tk50,000 last week from Tk 15,000-Tk 20,000 on normal days.
“The blockade is ruining our export prospects and growth,” said Abdus Salam Murshedy, president of Exporters Association of Bangladesh.
Many factories have halted production as they can’t bring imported raw materials from ports, he pointed out.
Buyers are very strict about lead time due to the upcoming Christmas sales, he noted, adding that many exporters cannot afford air shipment.
Salam expressed concern that small factory owners may go bankrupt if they fail to clear shipment on time.
Cost of production increased by around fivefold in some cases during the blockade, said Prem Sani, finance director of Epic Designers Ltd, a Hong Kong-based apparel exporter. “Everyone in the sector is counting losses.”
-With The Daily Star input
