Garment Exports from Bangladesh Face Delays Amid Labour Unrest and Political Instability

12 Sep Garment Exports from Bangladesh Face Delays Amid Labour Unrest and Political Instability

Garment exports from Bangladesh are under serious threat as hundreds of factories remain closed due to ongoing labour disputes. The closures, which began last week in industrial districts near Dhaka, have now spread, with 219 factories shut down in Ashulia, a key garment manufacturing hub, according to police reports.

Workers are demanding a wage increase from 16,000 to 28,000 BDT and additional benefits, along with improved facilities. Some factories have been vandalized, and in one incident, a Big Boss Corp factory was set ablaze after workers blocked roads to press their demands. The Bangladesh government has responded by forming a taskforce to address the labour issues and is considering establishing a new wage board.

Shams Mahmud, Vice President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted the significant financial losses the industry has incurred due to this unrest, in addition to the political instability seen in recent months and the impacts of flooding in August. “The latest unrest is resulting in the loss of winter work orders,” Mr. Mahmud said, adding that while many worker demands have been met, the unrest persists, potentially due to outside influences.

Further complicating the situation, political unrest continues to grip Bangladesh, with students holding daily protests and some instances of looting reported in malls across the country. There is growing concern that the government may impose a social media blackout, similar to measures taken during previous periods of unrest.

Export logistics have also been severely impacted, with the Bangladesh Inland Container Depots Association (BICDA) reporting a 15% drop in export trucks reaching depots. Some factories have shut down due to a lack of orders or an inability to secure raw materials.

Freight rates out of Bangladesh have surged. Spot rates for air freight from Bangladesh to Europe reached $4.95/kg last month, and $6.91/kg to North America, with load factors soaring to 97%. Some reports suggest rates have hit $9 to the US and $7 to Europe. Airlines have met with authorities to request better services and lower handling costs, as the country’s export logistics face increasing pressure.

Action Required:

If your factory has been affected by the closures, please contact them as soon as possible to determine when your goods will be ready for shipment to North America.