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It has been a year since the global shipping crisis caused by the coronavirus pandemic, and this could intensify in December-January due to increased exports, with readymade garment (RMG) exports reaching a peak then.
Export Promotion Bureau data shows RMG exports from Bangladesh increased by 11.48 per cent to $9.059 billion in the first three months of the current fiscal year compared to the same period last year.
Syed Nazrul Islam, the first vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said exports were growing by at least 15-20 per cent per month and would reach a peak by December-January.
He said the impact of the shipping crisis on exports in the coming days could not be ascertained yet.
Bangladeshi garment exporters’ profit margins would decline if the crisis was not resolved by then, he added.
The crisis began in August-September last year when the pandemic led to lockdowns in many countries, causing ships and containers to become stranded at ports across the world.
In the middle of this year, there were more empty containers than capacity at the ports in Bangladesh.
The country handled the situation somewhat by allowing additional ships on the transshipment port routes, including Singapore and Colombo.
But at many ports, including those in China, Europe, and the US, congestions increased instead of easing.
Sources said in the third week of this month, at least 100 ships were waiting to berth at the twin ports of Los Angeles and Long Beach on the West Coast of the US, which was a new record. The previous record was 97 ships.
All the ports in the east and west coasts of the US, including these two where a significant amount of Bangladeshi garments is sent, are now facing record congestions.
Muntasir Rubayat, head of operations at GBX Logistic, a leading shipping agent at the Chattogram port, and director of Bangladesh Shipping Agents’ Association, said it still takes 30-35 days to unload goods at the ports in Singapore and Colombo, up from 15-16 days before the crisis.
He said the crisis was not severely affecting exporters, but they were feeling the burden of the increased costs of transporting goods.
The Chattogram-Singapore and the Chattogram-Malaysia routes account for 75 per cent of the ships while the remaining 25 per cent take the Chattogram-Colombo route. These ships mostly carry RMG.
At present, it costs $20,000-22,000 to ship a 40 TEU (twenty-foot equivalent unit) container from the Chattogram port to the US through the transshipment port of Singapore or Colombo, which is almost double the amount before the crisis.
About 60,000 TEU containers of goods are exported through the Chattogram port every month while about 2.5 lakh are imported.
Since Bangladesh is import-dependent, the scale of the container crisis is comparatively low here.
BGMEA sources said garments account for 82 per cent of Bangladesh’s exports. Production costs are rising sharply due to increased shipping and container fares.
Nazrul said Bangladesh’s exports this year would reach the pre-pandemic level.
He said profit margins were declining due to the increase in ship chartering and other expenses.
At present, 60,000 TEU containers are shipped through the Chattogram port every month, up from 50,000-55,000 a year ago, said Bangladesh Inland Container Depots Association, which handles export cargo through the port.
Its Secretary Ruhul Amin Sikder Biplob said import to and export from Bangladesh had not yet eased though a year had passed since the shipping crisis.
He said exporters still had to wait for containers to reach their destinations, which could increase if exports rose.
