Clothing makers feel the pinch as container lines suspend shipments to Russia
Chattogram’s Sonnet Textile Industries received an order for 6 lakh T-shirts from Russian sports and outdoor goods retailer Sportmaster a few months ago.
In February, the manufacturer handed over 3 lakh of the T-shirts to the appointed freight forwarder to eventually ship the goods to Russia. The rest of the T-shirts are expected to be delivered later this month.
However, the ongoing war between Russia and Ukraine has made shipments uncertain as many international container lines, also known as mainline operators, have officially suspended shipments to Russia. In addition, others are also hesitant to take container bookings to Russia.
Dozens of garment makers in Bangladesh have started to feel the pinch. They fear being faced with order cancellations or having difficulty receiving payments. Sonnet Textile is one of them.
“We have handed over half of the ordered T-shirts to the forwarder appointed by our Russian buyer, but have not received any further updates,” said Gazi Mohammad Shahid Ullah, director of Sonnet Textile.
“We have not yet booked a vessel for the delivery of the remaining 3,000 pieces, as container companies are reluctant to accept bookings for Russia,” he told The Business Standard (TBS).
Usually, the main operators transport the goods to Russia as well as to Europe directly from Chattogram. Sometimes goods cleared in different European ports are shipped to Russia by road.
“Our buyer is in talks with us. They have informed us that they will arrange for the T-shirts to be shipped by alternate means,” the Sonnet Textiles manager added.
According to the Bangladesh Inland Container Depots Association, at least 166 containers that were supposed to be shipped to Russia remained stuck in different private depots after the suspension. There are huge loads of these goods in various depots waiting to be loaded onto containers.
“Usually, exporters send their goods to depots after confirming the reservation of the vessel. Due to the suspension of shipping operations to Russia, the goods remain blocked,” said Ruhul Amin Shikder, secretary general of the organization. , at TBS.
On March 1, the world’s three largest container companies – Mediterranean Shipping, headquartered in Switzerland, Maersk, based in Denmark, and CMA CGM in France – temporarily suspended cargo shipments to and from the Russia in response to Western sanctions against Moscow following its invasion of Ukraine.
Following this, the Japanese company One Line, the German company Hapag-Lloyd and a few others suspended their shipments to Russia. Although other shipping companies have not stated this openly, they are reluctant to transport goods to Russia.
11 major operators, including those mentioned above, transport Chattogram export containers to Russia as well as Europe.
“We haven’t taken container bookings to Ukraine since February 24 and containers to Russia from March 1,” said Azmir Hossain, Mediterranean Shipping’s operations manager for Bangladesh. . Other shipping lines have also suspended booking services, he added.
“We could send 150 TEU cargo containers to Russia at that time,” he told TBS, but also said bookings would not be started if the war continued.
Bangladesh sends almost 2% of its export items to Russia, mainly garments, and 55% to other European countries, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). In fiscal 2021, the country’s total apparel exports stood at $31.45 billion, while $687 million worth of goods were destined for Russia.
“A continuation of the war would have a negative impact on new orders and the supply chain,” said BGMEA Vice President Rakibul Alam Chowdhury.
Other BGMEA leaders were also concerned that the post-war period would bring uncertainty over LCs, payments, etc. Everything will depend on post-war relations between the affected countries, they said.
Clothing makers are also concerned as several of their biggest buyers, including multinational clothing brands H&M and Inditex, have temporarily shuttered operations in Russia. In addition, the suspension of several banks from the global financial transaction telecommunications network, Swift, is also expected to affect Bangladeshi exporters.
“The ongoing Russian-Ukrainian war has plunged global trade, including the ready-to-wear sector, into a serious crisis. We are concerned about receiving late payments from our Russian buyers due to Swift restrictions,” said Mr. DM Mohiuddin Chowdhury, another director of BGMEA. and Chief Executive of the Clifton Group.
“There is no certainty when we will get relief from the crisis,” he added.
The director of the Bangladesh Shipping Agents Association, Shahed Sarwar, fears that major shipping companies will impose surcharges on shipping rates if the Russian-Ukrainian war continues.
Referring to these previous international wars, he said the global supply chain could see a major disruption in the future.