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Bangladesh continues to bleed due to uncertainty

The escalating political crisis in Bangladesh poses a severe threat to international clothing retailers who source their apparel goods from the country, with billions of dollars in potential orders already lost this year.

Transport blockades have brought Bangladesh’s export supply chain to a halt. So far this year shipments through Chittagong port have declined by 40 per cent and readymade garment production is down by 20 to 30 per cent. Chittagong port handles up to 92 per cent of Bangladesh’s exports and imports. There is little prospect that the situation will improve this year. The average ship-turnaround time in Chittagong has now reached 4.9 days, compared with less than four days in India and just 10 hours in Hong Kong.

The infrastructure connecting the garment manufacturing centers with Chittagong continues to pose significant supply chain challenges. The country’s export sector is undermined by one of the least efficient and most expensive export processes in south Asia. Despite advances in simplifying and automating customs procedures, compliance still entails considerable logistical and operational costs for investors.

Other continuing risks for investors and western high street garment buyers include the endemic corruption at all levels, but particularly at the trade’s export point.

 
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