Exporters suffer loss in air shipment of garments

25 May '11

3 min read

Owing to the inadequate infrastructure facilities at the Chittagong Port and its inefficiency and problems in handling cargo, the exporters were compelled to airship their goods. This has caused the Bangladesh readymade garment (RMG) industry to suffer a monetary loss of about Tk 26 billion in last two years.

As stated by the RMG exporters, during May-August last year they were required to airship Tk 20 billion worth of garments to overseas importers, as there was a logjam of ships and cargo at the port, due to frequent strikes by the dock workers who were pushing for their demands, thus putting the port authority in a tight spot.

Later, during January to April 2011 too, the exporters faced similar situation and suffered a loss of six billion Tk for air shipment of garments, as at that time too the consignments were getting delayed due to the operational inefficiency and inadequate infrastructural facilities.

However, the BGMEA leaders admitted that the port authorities prolonged the ships' cut-off time by 24 hours, which to some extent gave respite to the exporters as it facilitated and speeded-up the export activities.

BGMEA stated this in a letter to the Chittagong Port Authority (CPA) in response to CPA's decision to pull back the extended cut-off time facility from June 2, 2011 owing to installation of the Computerised Terminal Management System (CTMS) in the Port.

Affected by the traffic jam on highway due to demonstrations by various groups or other political programmes, around 25-30 percent of RMG export volumes from Dhaka fail to reach Chittagong Port in time and this is in spite of ship's extended cut-off time. As a result, as the exporters need to ship their goods by air route, it results in heavy financial loss to the industry, BGMEA said.

Accounting for 80 percent of country's overall export revenue, the RMG sector contributed US$12.37 billion to state treasury during last fiscal, and if the sector is able to maintain the present growth rate of 20 percent per annum, its export earnings for the current fiscal are likely to touch a whooping US$18 billion, BGMEA said.

It said that the port, during the last fiscal year, shipped 599,769 TEUs containers of export cargo, with 80 percent of them belonging to the RMG sector.

Further, it urged the port authority to continue the cut-off time relaxation in the interest of the country, as presently the RMG industry is developing at a higher pace with bulk orders flowing in from new markets across the world.

Earlier, the CPA in a letter dated April 28, 2011, which was authorized by the Director (traffic), stated that the 24 hour relaxation in cut-off time offered to ease RMG exports would be withdrawn from July.

The CTMS would be installed in the Port in order to boost its efficiency and to increase its container handling capacity to match the international standards. Thus, immediately after the Dry Run Operation the relaxation in ships' cut-off time that the exporters are enjoying now would be ended, the CPA letter stated.

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