In a recent meeting in Dhaka with representatives of global apparel buyers, leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) requested the buyers' forum to avoid demanding discounts for shipment delays caused by factory closures and the violent curfew.
Arshad Jamal Dipu, Vice President, BGMEA, emphasisedon the need for support from buyers, noting that factories and production schedules have been disrupted due to closures and communication outages. Dipu specifically requested the forum to refrain from imposing 'system-generated' discounts on member factories for delayed shipments, as these discounts, ranging from 5.0 to 10 percent, are automatically triggered by major buyers' systems if there is a 15-day delay. Additionally, the BGMEA urged buyers to consider reducing air shipments.
Dipu, who is also the Chairman of Tusuka Fashions, highlighted the costly nature of air shipments needed to meet deadlines. He mentioned,his company had to spend Tk 35 million on air shipments to send 80,000 pieces of garments. Industry insiders noted that the peak season for sweaters and winter garments is particularly affected, with substantial losses anticipated if air shipments are required.
An exporter pointed out that air shipment costs to the European Union have risen to $5.00 per kg of garments, compared to $1.70 per kg in India. This significant cost increase poses a particular challenge for winter garments like jackets, which are more expensive to ship than other items like denim jeans.
Exporters are concerned that next season's work orders may shift to other countries due to the internet shutdown, potentially sending a negative message to buyers and undermining their confidence. Although export-import activities have resumed at ports, exporters now face a shortage of containers and additional demurrage charges at Chattogram port due to the internet shutdown. Currently, around 37,000 containers are stranded at ports, including 13,000 ready-made garment containers, resulting in approximately Tk 100 million in port demurrage charges.
