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Bangladesh - January 30, 2024

Import-export hit hard for transport cost hike

Farhad Chowdhury : One attack after another on commercial ships in the Red Sea. Ships traveling between Bangladesh and Western countries are taking different routes to avoid attacks. It takes more time to import and export goods. Bangladeshi exports take more than 10 to 15 days to reach the transshipment ports.
Once there was a delay in the handling of goods due to container crisis, but that has now stopped. However, due to instability in the Red Sea, exports are taking longer to reach their destination. This increases both product lead time (the time it takes for the product to reach the warehouse from the date of purchase order) and cost. As a result, the exporters are in trouble. At the same time, imports have also been adversely affected. Such information was given by freight forwarders and traders.
Exporters say that due to the war situation in the Red Sea, the goods are stuck in the mother vessel for a long time. Due to this, the cost of transporting goods is also increasing. Foreign shipping companies told exporters that there is no solution to the ongoing global crisis. An alternative process is underway to resolve the issue. But the container crisis is over.
How crisis began
Most of the export products from the ports of Bangladesh bound for Europe, America are first taken to transshipment ports like Singapore, Colombo, Port Klang by various feeder ships.
Then it is transferred from there to various mother vessels. These mother vessels used to reach their destination through the Suez Canal through the Gulf of Aden and the Red Sea.
However, the United States and the United Kingdom have recently attacked the Houthi rebels in Yemen in retaliation for the attack on ships operating in international waters in the Red Sea. After the attack, the mother vessels had to abandon this route and go around UttamashaAntrip through the Straits of Gibraltar. All ships take about two weeks extra time on this route. As a result, mother vessel schedule disruptions and crises have developed at transshipment ports. A deep crisis has been created with timely transportation of goods.
In this regard, BK Fashion Wear Limited Managing Director Rezwanul Haque Siraji told, “We are unable to use the regular channel due to war and conflict.” In that case our shipment schedule is delayed by 15 days. The product which used to arrive in 30 days, now takes 45 days. Products are moving from far away by routing. As a result, the ship fare has increased by almost 45 percent. Our expenses have also increased.
Attacks still going on in Red Sea
Senior Vice President of Bangladesh Freight Forwarders Association Amiya Shankar Burman told, “I am getting news that there is a state of war. We have nothing, this is a global problem. Due to this, the ships are traveling on other routes.
Stating that there is no shortage of containers, he said, “We have enough containers. There is no problem in importing or exporting goods from neighboring countries. But the import-export of goods in Europe and America is being interrupted.
Those concerned say that if the mother vessel crisis is not resolved quickly, import and export in Europe and America will be threatened. 63 percent of Bangladesh’s exports go to these countries. However, eight percent of the imported goods come from these countries. Traders say that freight charges for container transport have increased by at least 40 percent. Freight charges may increase by another 25 percent.
Bangladesh Shipping Agents Association Vice Chairman Md. Riaz Uddin Khan told, “It takes more than 10 to 12 days to transport goods. In European countries, the rent of each container from Bangladesh has increased from one to one and a half thousand dollars.
Abul Bashar Chowdhury, chairman of consumer goods importer BSM Group told, “There is a problem in bringing goods from Europe through the Red Sea. Insurance and fuel costs increased due to shipping on alternative routes. As a result, shipping companies have increased the charges for transporting goods in containers and ships. I still don’t see any hope of solving the problem. The shipping companies are asking us to wait.
Bangladesh Garments Manufacturers and Exporters Association (BGMEA) vice-president Rakibul Alam said, “Due to the problem on this route, the garment sector is having a negative impact. If the problem is prolonged, it will create a new crisis in this sector.

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