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Blast! Factory closures, freight disruptions, supply chain disruptions

Aug 08,2024

The civil unrest in Bangladesh has led to serious disruptions in the supply chain, the closure of factories, the stagnation of exports, and the disruption of seaports, airports and customs processes. The garment industry, as a major source of foreign exchange, has lost about $0.27 billion. Port deliveries have fallen sharply and there is a serious backlog in the yard, but the number of delivery orders has rebounded, indicating that the supply chain may be gradually improving, but it will take time for a full recovery.

Bangladesh's supply chain has been plunged into serious chaos due to growing unrest in the country, which has forced the closure of several factories for two days and brought export activity to a near-total standstill. The turmoil not only affected the normal operation of seaports and airports, but also brought customs processes to a near-total halt, further exacerbating supply chain disruptions.

The Bangladesh Garment Manufacturers and Exporters Association reported that the garment industry, the country's main source of foreign exchange, has suffered significant losses of about US $0.27 billion. At present, there is no clear decision on whether the factory can resume production on the 7th.

Ruhul Amin Sikder Biplob, secretary-general of Bangladesh Inland Container Yard Association, noted that "on Monday night, we suspended the sending of boxes to the port due to security concerns." He further revealed that due to the nationwide violence, the number of trucks received by the port yard on the 5th and 6th has been very small, which has seriously affected the logistics efficiency.

Chittagong Port Authority spokesman Omar Faruk said that as of the morning of the 6th, the port terminal had only completed the delivery of 329 TEUs, far lower than the daily delivery of more than 4000 TEUs under normal conditions. He predicted that the delivery volume for the whole day of the 6th may increase to about 1000 TEUs, but it is still far below the normal level.

At present, Chittagong Port is severely congested. The data shows that,About 50 vessels lined up within 25 nautical miles outside Chittagong, with 41,000 TUE of containers in the harbor.

In addition, the port unloaded approximately 2,409 import containers from ships on May 5 and shipped 1,265 export containers. However, by the morning of the 6th, 44,117 standard containers had been overstocked in the port yard, occupying about 80% of the port area, seriously hindering the normal loading and unloading of containers.

Despite the difficulties, Muntasir Rubayat, head of operations at GBX Logistics, said that the number of delivery orders issued by shipping agents on the 6th has rebounded, which may indicate that the supply chain situation is gradually improving, but it will take time for a full recovery.

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