Kontoor Brands recently refused to accept shipments worth $2.6 million (more than Tk 22 crore) dealing a serious blow to 11 Bangladeshi garment exporters although the shipment reached the port on time. As a result of this, the garment companies will have to bear the freight charges for shipping the goods back and face compensation claim from US retailer Kontoor Brands. Kontoor, however, claims it sent back the goods as the shipment missed the sales season. The goods were shipped from Bangladesh in January this year.

Of the 11 companies, Nassa Apparels lost $998,110. The exporter claimed to have shipped the goods on free on board (FoB) basis. Scott Deitz, Vice President for global corporate relations of Kontoor Brands stated that according to Kontoor’s contract terms, the vendor bears all risk of loss of the goods only until the goods reach the destination terminal and transfer of the title of goods to Kontoor takes place. He claimed that many of the vendors did not have the necessary insurance, while others chose not to protect themselves from the potential risk of loss.

The brand is therefore taking certain steps to assist these affected uninsured vendors who continue to produce goods on the brand’s behalf. This assistance includes paying demurrage fees, costs to loss adjustors to prevent the goods from being abandoned, and return-to-origin transportation fees on behalf of the vendors to limit their further losses. Kontoor is also helping to arrange for the now distressed goods to be sold through other channels to mitigate the losses for these affected vendors.