The government has decided to provide a seven-day demurrage waiver to the country's readymade garments (RMG) sector to compensate for their economic losses due to the recent unrest.
Under the request of BGMEA, a policy decision has been taken regarding the waiver of demurrage charges levied on clearance of imported goods of the RMG sector stuck at Chittagong Port.
State Minister for Shipping Khalid Mahmud Chowdhury announced this decision when the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) leaders met him at his office on Sunday afternoon.
Khalid Mahmud Chowdhury said: “The Chittagong port was never closed for a single day during this ongoing situation but due to the closure of internet connection the digital customs facilities were off.”
“BGMEA leaders asked me to meet their demands and we have decided to give them a seven days demurrage waiver for their container in our ports,” he added.
At the end of the meeting while talking with the journalist, BGMEA President SM Mannan Kochi said that currently approximately 37,000 containers are pending at ports among them they have 13,000. Already, port demurrage charges of more than Tk10 crore have been levied on the RMG exporters.
“From July 17, we failed to proceed with the export and import. The garment sector has faced a loss of around Tk7,000 crore due to this anti-quota student movement last week,” he added.
According to the industry insiders, due to the ongoing situation in the country and curfew and lack of online connectivity to the servers of port and customs led to the disruption of unloading of goods from ships at Chittagong port, RMG exporters were not able to clear the goods at a specified time.
Due to the congestion of containers at the port, additional demurrage charges are assigned to the release of the imported goods stuck at the port according to conventional rules.
In this context, the BGMEA delegation of the BGMEA met with the state minister of Shipping. The BGMEA delegation included 1st Vice-President Syed Nazrul Islam, Senior Vice-President Khandaker Rafiqul Islam, Vice-President Rakibul Alam Chowdhury and Director Ashikur Rahman Tuhin and Mohiuddin Rubel.
According to the RMG manufacturers, the sector lost around some $160 million per day due to the protests-led violence and a suspension in the internet and they couldn’t communicate with buyers to know about the situation which tarnished the image of the country as one of the largest RMG exporters of the world.
The situation also eroded the foreign retailers’ confidence in Bangladesh as many of the local garment suppliers have received 30%-40% fewer work orders than usual as the buyers were following a go-slow policy.
Meanwhile, in a meeting with Salman F Rahman, private industry and investment adviser to the prime minister and business leaders at the BIDA office on the same day, businesses need long-term support from the government to recover from damages caused during the quota reform protest.
Mahbubul Alam, president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) made the support request to fully resume activities in Chittagong and other ports.
Salman F Rahman said that there has been a container gridlock in the Chittagong port. The business leaders mentioned it during the meeting and they also requested an alternative internet connectivity to keep the business running if such a situation arises in future.
The Foreign Investors’ Chamber of Commerce and Industry (Ficci), meeting with Salman F Rahman MP, private industry and investment adviser for the prime minister on the day, said that the recent shutdown has had a significant economic impact on Bangladesh, with estimates of over $10 billion hit and increasing.
The FMCG industry would have a setback of over $100 million, as supply lines and operations have been significantly impacted.
The shutdown has also affected export-oriented industries, banking, insurance, logistics, infrastructure, telecom, e-commerce, freelancing, ride-hailing, software development, and so many MSMEs that rely on social commerce and so many others, the chamber further stated.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) had also recently urged the government to waive the demurrage charges for delays in taking delivery and shipping goods from ports in the last five days.
They also demanded the authorities to refrain from imposing any new charge in between 15 days after normalcy returns to shipment and import clearance activities at the ports.
Chittagong port, which handles nearly 90% of Bangladesh's over $100 billion international trade, witnessed container congestion amid problems in duty assessment by customs authority, and the payments of bills at banks in the absence of internet since July 18 night.
The disruption has already caused a significant backlog, with the number of containers rising to 41,000 TEUs, up from the usual 30,000 TEUs. This congestion threatens to increase delays and inflate costs further, leaving businesses struggling to manage the fallout from an issue beyond their control.
Saddam Hossain also contributed to the report.
