Leaders of the garment industry will meet with representatives of global apparel buyers in Dhaka today (Monday) to discuss current issues and potential solutions concerning the supply chain disruptions caused by the anti-quota movement.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) will also seek support from the buyers' forum and request them to refrain from demanding discounts due to delays in shipments caused by factory closures amid the violent curfew, sources said.
Factories and production schedules have been disrupted due to closures and communication outages, necessitating adaptations to offset losses. So, the sector needs support from buyers, they added.
When asked, Arshad Jamal Dipu, Vice President of BGMEA, said, "We will meet today (Monday) with the buyers' forum to discuss the current issues."
He said that they will request the forum to provide full support to member factories by not imposing 'system-generated' discounts for delayed shipments.
He explained that discounts of 5.0 to 10 percent are automatically generated by the systems of major buyers if there is a 15-day delay. They will also request the buyers to consider reducing air shipments.
Mr. Dipu, who is also Chairman of Tusuka Fashions Ltd, further said that many are resorting to costly air shipments to meet deadlines. "As of Sunday, my company had to make air shipments worth Tk 35 million to send 80,000 pieces of garments," he noted.
Industry insiders said this is the peak season for sweaters and winter garments, and they will face significant losses if they go for air shipments.
An exporter mentioned that air shipments to the European Union now cost US$5.00 per kg of garments, compared to only $1.70 per kg in India.
Winter garments like jackets will face substantial losses due to higher shipment costs, compared to other garments like denim jeans, he noted.
Exporters fear that next season's work orders might shift to other countries due to the internet shutdown, which could send a negative message to buyers and result in a loss of their confidence.
Although export-import activities have resumed at ports, exporters are now facing a shortage of containers, they said, adding that they are also now facing additional demurrage charges at the Chattogram port due to the internet shutdown, despite not being at fault.
Currently, about 37,000 containers are stranded at ports, with 13,000 being ready-made garment containers. As a result, the garment industry is incurring approximately Tk 100 million in port demurrage charges, said the exporters.
The BGMEA leader said they will address all the ongoing challenges and request buyers not to shift any work orders to other countries.
Earlier, on July 25, The Ethical Trading Initiative (ETI), a UK-based alliance, called on buyers to adjust their expectations and purchasing practices to adapt to the exceptional circumstances in Bangladesh due to the anti-quota movement.
The ETI stated that production timelines may need to be extended due to factory closures resulting from unrest and state-imposed curfews.
Once communication channels are re-established, responsible businesses sourcing from or operating in Bangladesh should engage with their suppliers to understand the potential impacts of the unrest on their orders and agree on manageable and realistic adjustments in line with ETI's recommended responsible purchasing practices, it said.
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