The world’s second-largest clothing exporter has been grappling with significant supply chain disruptions for the past month. Political turmoil was soon followed by a natural disaster, with more than 40% of deliveries to the main export port now severely impacted.
Just weeks after riots and a coup, Bangladesh is now facing the devastating effects of widespread flooding. Heavy rains in the country’s southeast and the Indian state of Tripura have resulted in flooding across 11 out of Bangladesh’s 64 districts. Among the affected areas are major sections of the highway connecting Dhaka to the port city of Chittagong, the nation’s primary freight corridor.
Last week, The Loadstar reported that in some areas, the highway was completely submerged, causing traffic jams stretching up to 40 kilometers. According to the Bangladesh Inland Container Depots Association, last Thursday and Friday saw only 2,100 containers transported to depots near the port of Chittagong—1,000 fewer than just days earlier. Typically, around 3,500 truck shipments reach the port’s warehouses each day, according to Ruhul Amin Sikder, the association’s secretary-general.
The disruption to the port, which handles 95% of Bangladesh’s clothing exports, is expected to cause further delays and port congestion similar to what the country experienced a few weeks ago.
In early August, during the riots that led to Prime Minister Sheikh Hasina fleeing and the military seizing power, operations at Chittagong Port were suspended. At one point, up to 50 ships were waiting to enter the port, and storage yards were nearly 80% full with uncollected containers.
This raises concerns over the timeliness of deliveries to key buyers of Bangladeshi textiles, primarily the United States and European nations such as the UK, Germany, France, Spain, and Italy. Delays are likely to drive up container rates and, consequently, product prices.
Bangladesh is the world’s third-largest clothing exporter and the second-largest in the ready-made garment sector, exporting textile products worth approximately USD 47 billion annually. However, the country’s unstable political situation and current weather-related challenges may prompt many importers to reconsider their sourcing strategies. Bangladesh could potentially lose market share to neighboring countries like India, Sri Lanka, and Vietnam.
