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RMG goods, raw materials worth $450m stuck in strike

Arifur Rahaman Tuhin
08 Nov 2021 00:00:00 | Update: 08 Nov 2021 09:31:49
RMG goods, raw materials worth $450m stuck in strike

Apparel goods worth nearly $350 million – ready to be shipped overseas – are stuck at factories due to the transport strike since Friday, announced following the government’s decision to hike diesel prices.

Moreover, raw materials worth around $100 million bound for the apparel factories are also stuck in the Chittagong port, waiting to be released and delivered to their respective destinations, industry people said.

If the strike is not withdrawn soon, apparel goods worth around $115 million will get stuck each day, industry leaders have warned, adding that if these items do not reach the designated cargo ships within schedule, these vessels will not wait for the export consignment, they added.

The exporters will then have to deliver their shipments through air cargo, which will be far more expensive and incur hundreds of crores of taka in losses.

Bus operators withdrew their strike with immediate effect on Sunday evening after the government raised long-route bus fares by 27 per cent, and hiked bus fares inside city corporation areas to Tk 2.15 per kilometre.

But cargo transporters made no such announcements till the filing of this report.

Detailing their predicament, Bangladesh Garment Manufacturers and Exporters Association’s (BGMEA) Vice President Shahidullah Azim said, “We have been trying to recover our losses after suffering greatly amid the Covid-19 pandemic.

“But the transport strike and new fuel prices have pushed us back. Our transportation system has collapsed, and we cannot release raw material from the port. We are getting pressured from all sides.”

He added that the new fuel prices will increase their production costs, and the transport strike could cause them to miss shipment deadlines. “There is no logic behind the government’s decision to hike fuel prices without any dialogue with the stakeholders,” Azim said.

According to the BGMEA, the RMG sector is set to export apparel goods worth around $3.5 billion in November, and they need around a billion-dollar worth of raw material imports to meet this target.

Addressing the issue, Envoy Group’s Chairman and industry leader Kutubuddin Ahmed said, “The export sector has been under serious pressure for the last three days as they could not export a single consignment during this period.

“If this continues, exporters and the whole country will suffer. We have a shipment deadline and if we fail to meet this obligation, buyers will ask us for air cargo deliveries. We cannot afford this.”

The government should hold talks with the stakeholders and resolve this crisis, otherwise apparel exporters will incur losses amounting to hundreds of crores of taka, Kutubuddin added.

A number of exporters told The Business Post that due to the previous lockdown in July they were late in delivering shipments, but the buyers took the matter into consideration because of the Covid-19 pandemic.

However, the ongoing crisis is an internal issue, and the buyers have already warned them to deliver the goods on time.

A BGMEA Director and Nipa Group’s Managing Director Khosru Chowdhury said, “The transport services remain completely halted. How will we meet our shipment deadline on time? Besides, we will have to shut production anyways due to raw material shortage caused by the strike.”

Apparel exporters further claimed that the port will suffer a container gridlock for a long time if the transport strike is not withdrawn soon.

Faisal Samad, director of BGMEA, said on the matter, “The Chittagong port is our main seaport, and we import most of the goods from there. A large amount of raw materials are now waiting for clearance and we have to pay extra charges for those. The new fuel prices and transport strike has impacted all sectors, not only us.”

The government should meet with transport owners and other stakeholders to resolve the ongoing crisis, and the BGMEA might call them for a meeting for this purpose, he added.