"Concerns grow over apparel backlogs, fear of losing buyers", 26 July 2024

Export-oriented readymade garment (RMG) factory owners face significant losses due to the four-day factory closures because of the quota reformation movement. Backlogs have been caused by production stoppages, poor buyer communication, and interrupted export and banking activities.

Vice President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Fazlee Shamim Ehsan, stated to the local media, “We are unsure of how we will deliver items to customers on schedule.”

“We will have to send the products through costly air freights, accept the penalty from buyers, and bear the high freight costs.”

Ehsan explained that the country’s exporters will incur an extra cost of a minimum of Taka 1,000 crore due to the late shipment discounts demanded by the buyers and the high cost of air shipments.

“Most importantly, we missed a lot of shipment deadlines, which may lead to order migration to our competitors. Due to the enforced internet shutdown, we may lose our customers’ confidence as well.”

However, Bangladesh is currently lagging behind other countries in maintaining its export growth. From July to April, the nation’s growth was negative on an annual basis by 6.8 per cent. During this period, the garment industry, which accounts for over 85 per cent of exports, experienced negative year-over-year growth of 6.7 per cent.

Industry insiders continue to worry about losing long-term profits, missing deadlines, and missing orders.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President SM Mannan Kochi said, “We have already faced nearly Taka 6,500 crore indirect losses. The indirect losses are uncountable as of yet. Our key challenge is to release the backlogs as soon as possible.”

BGMEA Senior Vice President Khandaker Rafiqul Islam said, “We are facing several crises due to the protests. Brands are worrying about receiving their goods on time and they are likely to seek discounts while Inland Container Deport (ICD) may charge demurrage as well.

“We will talk to the buyers’ forum to offer us relief from penalties and to ICD owners for cutting the demurrage payables. We, however, will not be able to avoid the costly air freights. That is our main tension.”...