The developments were a great relief for apparel makers who had lost contact with global buyers and seen export consignments stockpiled at port as the internet blackout disrupted customs clearance and shipping links
Factories resumed in full-swing on Wednesday (24 July) and banks reopened as curfew eased, and partial restoration of internet facilitated customs procedures at Chattogram Port, paving the way for resumption of export-import trades after five days.
The developments were a great relief for apparel makers who had lost contact with global buyers and seen export consignments stockpiled at port as the internet blackout disrupted customs clearance and shipping links.
The country’s industrial activities and external trade were stalled amid the internet blackout since Thursday night and curfew imposed on Friday midnight to contain widespread mayhem stemming from anti-quota student protests.
Industry leaders said as they could restore their trade and transaction links with the rest of the world and global buyers regained confidence in supplies from Bangladesh, recognising the latest disruptions as a case of force majeure – events beyond suppliers’ control.
In some cases, however, they will have to ship goods by air to reach buyers on time and avoid cancellations, they said, citing new challenges.
Several thousand export consignments, 80% being apparels, and import containers, were stuck at the country’s main port.
Industries ranging from garments and textiles to ceramics, steel, and cement suffered significant losses, with the BGMEA reporting daily losses of Tk1,600 crore.
At a meeting with the prime minister on Monday, business leaders urged for restoring internet and relaxing curfew to help them keep factories running.
The curfew is being relaxed gradually, for 7 hours on Wednesday, and security in industrial zones was beefed up, creating an enabling environment for industries and businesses, making exporters optimistic about a recovery from the past week’s business losses and supply chain disruptions.
Great relief for RMG
“It seems everything is back to normal as we’ve resumed exports and imports. If utility services remain stable, we’re confident we can recover the losses,” MA Jabbar, managing director of DBL Group, one of the largest exporters, told The Business Standard.
Port activities also indicate improvements. Following an almost complete halt in handling export and import cargo for five days due to the internet blackout, the Chittagong Port Authority processed 1,500 TEUs on Tuesday and around 2,000 TEUs on Wednesday. Customs and port officials said they need a few more days to return to the normal handling capacity of 3,000 to 3,500 TEUs per day.
Syed M Tanvir, managing director of Pacific Jeans, the largest local investor in the EPZ, said following the restoration of the internet connection, they are now in discussions to update buyers on how production and delivery have been affected.
“We have good relationships with our buyers, and they may consider this sudden disruption, which was beyond our estimation,” said Tanvir, adding that there is no fear of order cancellations. “Hopefully, we will be able to recover the loss,” he noted.
Tanvir said in the last five days, Pacific Jeans has lost about $10 million in production due to the factory closure and the company has to revise its plans to produce these goods.
He further added, “This backlog will not only affect these goods but also future production plans. It will take at least another two months to normalise the supply chain to its previous state.
“I fear that some of these goods may need to be air-shipped, while others might face discounts from buyers due to delayed shipment.”
Ashikur Rahman Tuhin, managing director of TAD Group, said despite internet blackout and other challenges, the positive side is that buyers have maintained their faith on them.
“We had tried to maintain communications with all buyers through cell phone calls and SMS during the internet communication disruptions,” he said.
After the restoration of the internet, now both parties are resending their pending emails. He hoped they would be able to get updated information on overall production and shipment in the next two to three days.
His group’s monthly export is about 7 million pieces of apparel items through their buying house. Due to factory closures, he might face deferred shipments of approximately 1.5 million pieces of garments.
Echoing with Tanvir, Tuhin said those products, intended for the late winter season, might incur hefty air freight costs; otherwise, they may miss the season entirely.
“We hope to start corresponding for next year’s winter season within a short time as July to August is the time for winter season orders,” said Tuhin, also a director of the BGMEA.
Fazlee Shamin Ehsan, CEO of Fatullah Apparels, one of the top LEED platinum-certified knitwear exporters, said besides the production loss, exporters might face container congestion at Chattogram port, which started before the factory closure. He expressed concerns that buyers may push for costly air freight.
Ehsan also mentioned that exporters are facing challenges in sending samples for next year’s winter season due to the potential overload of international couriers. If exporters cannot send these samples on time, they may receive fewer orders for the next winter season, added Ehsan, who is also a Vice President of the BKMEA.
He noted that the company’s monthly exports are around $1 million. Although this month might be affected, he is very optimistic about recovering from this setback.
The government earlier decided that the ID cards of the RMG workers will be considered as curfew pass to facilitate their movement.
A week needed to clear port backlog
With partial restoration of internet connections, Chattogram Port and Customs operations started to return to normal from Wednesday morning. Delivery activities at the port have resumed.
However, businesses continue to face challenges as stakeholder institutions, particularly C&F and shipping agent offices, remain only partially connected to the internet. Currently, C&F agents can submit bills of entry on only four computers at the Customs office.
Port and customs officials estimate that it will take more than a week for container congestion at the port to clear.
Chattogram Port Authority Secretary Md Omar Faruk told TBS that the port’s one-stop service operations restarted on Wednesday morning. Once customs clearance is completed at the Chattogram Custom House, goods are being delivered from the port upon obtaining the outpass.
Typically, 3,500 to 4,500 TEUs of containers are delivered daily from the yards of the three terminals at Chattogram Port. Since Friday, this number had fallen to nearly zero. In response, the Chattogram Custom House began manual customs clearance, resulting in the delivery of 1,500 import containers from the port on Tuesday, according to customs authorities.
At the Chattogram Custom House, 2,000 import bills of entry and 5,000 export bills of entry are filed daily. C&F agents submit these bills using the ASYCUDA World software from their offices.
Deputy Commissioner Imam Gazzali of the Chattogram Custom House told TBS that businesses are now able to clear all import and export goods. If a pay order or invoice is missing, clearance is being allowed based on an affidavit.
He noted that customs clearance for import and export goods has fully resumed as of Wednesday, with officials expediting the clearance of goods for which bills of entry were filed earlier. Due to incomplete internet connectivity at C&F agent offices, customs has provided access to the ASYCUDA software on several computers, enabling agents to file bills of entry and export bills.
Banks face pending workloads
After three days of complete closure, banks reopened on Wednesday with 50-60% of their branches operational. However, they were occupied with clearing backlogs. For instance, a third-generation private bank processed around 15,000 pending inward remittance transactions on that day.
Banks also worked to settle pending transactions with their correspondent banks abroad, due to the lack of communication over the previous three days. However, the partial restoration of internet connectivity disrupted core banking systems, affecting daily operations such as fund transfers, loan processing, and account management, according to bankers.
Also, a large number of customers flocked to the reopened branches to withdraw cash, resulting in long queues and extended wait times at various locations.
In conversations with several bankers, TBS learned that while there were few new letters of credits (LCs) opened, especially for imports of essential commodities. But some banks did manage to process back-to-back LCs.
