80pc logistics firms struggle to stay in race amid turmoil

Shamsul Huda | Published: December 18, 2013 00:00:00 | Updated: November 30, 2024 06:01:00

The logistics businesses are faced with the worst of time because of the prolonged turmoil in the apparel sector and the political instability, sources have said.
About 80 per cent firms were forced on the brink as they were not getting enough cargoes for handling, as the buyers were leaving the apparel sector amid frequent shutdowns-both political and industrial-in the last six months, a source involved in the business said.
He also said though the political unrest was spelling short-term problems for business of freight forwarding, the repeated flare-ups of unrest in the export-oriented apparel sector caused long-term problems.
Mr Amirul Islam Chowdhury (Mizan), senior vice president of Bangladesh Freight Forwarding Association (BAFFA), said: "As many buyers are looking for alternative markets, it shows they are losing their confidence in us fast because of the political instability and resultantly the growing logistics business is at stake."
He said currently many orders for apparel products were being shifted to India, Vietman, Cambodia and Myanmar as the buyers found those countries more stable than Bangladesh.
He said in the coming days the volume of air freights might increase as the exporters were unable to make shipments by sea due to the shutdowns affecting transportation of goods by road.
Mr. Chowdhury said the entire logistic business collapsed and there could be a long-term effect of it on the business, if the trouble in the ready-made garment (RMG) sector continues.
He said more than 80 per cent logistics firms were in trouble, as they were not getting enough cargoes and were failing to maintain shipment schedules.
Syed Ershad Ahmed, immediate-past president of the Foreign Investors' Chamber of Commerce and Industry (FICCI), said transportation of raw materials from ports to Dhaka was being hampered seriously and resultantly production in factories and exports were being affected.
He said the volume of cargoes both by sea and air declined indicating that Bangladesh was left at risk of losing the RMG business totally.
The former FICCI president said after the glory days of jute the promising RMG sector also might lose the international market, if the current stalemate continues.
He said already some buyers were moving to other neighbouring countries where the prices are cheaper and political stability exists.
A source in the Bangladesh Inland Cargo Depot Association (BICDA) said millions of dollars were invested in the cargo depot business, but due to various reasons the logistics business was facing serious trouble.
He said the overall investments in the business were left at risks, though it was masterminded to ease the pressure of export and import business on ports.
Along with foreign competitors, currently hundreds of local freight forwarding companies are engaged in logistic business. There was a growth in investments in the sector as the trade volume of the country was increasing.
A source in a local freight forwarding company said though the short-term problem caused by the political instability could be overcome, it became a big headache that the RMG buyers were losing their confidence in the local manufacturers.
He said it was inevitable to save the RMG sector and thus the billions of dollars invested in many other areas of business linked to the RMG sector.
He also said the logistics business would be the worst-affected area, if the RMG sector faces further trouble in the coming days.