Dhaka airport warehouse overfilled with imported garment raw material

The cargo warehouse at Hazrat Shahjalal International Airport in Dhaka has become overfilled with imported garment raw material because importers have stopped taking delivery since March due to a halt in production.

A total of 2,033 tonnes of imported raw material was lying+ undelivered in the warehouse until April 20. But the warehouse has a storage capacity of 800 tonnes, thus creating a problem for Biman Bangladesh Airlines – the authority in charge of maintaining the warehouse.

Biman says that a large portion of the undelivered raw material was imported by garment factories.

Meanwhile, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has sought a waiver on the demurrage being incurred for keeping the raw material in the warehouse for an extended period.

BGMEA President Rubana Huq, who was also unable to take delivery of raw material imported for her factories, sent a letter to Biman on April 7, requesting that the demurrage be waived.

Usually, cargo importers get three days to keep their raw material in the warehouse free of cost. Demurrage becomes applicable if they cannot take delivery of the goods within this period.

Biman initially charges Tk25 per unit for 10 days after the three-day period ends. Then it increases the charge to Tk100 for the next 10 days, and then to Tk300 for the 21 days after that. 

Although passenger flights have been suspended since the last week of March to curb the spread of coronavirus, cargo transportation has remained normal. 

When contacted, Md Mokabbir Hossain, managing director of Biman, said only delivery of imported raw material used in the treatment of coronavirus is being taken regularly.

He added that in April, the total amount of imported cargo was 1,682 tonnes, of which 1,616 tonnes – mostly medical equipment – were delivered.

In the letter to Biman, the BGMEA said 1,110 garment factories have lost export orders worth $3.02 billion so far since the Covid-19 outbreak. 

The huge number of order cancellations has plunged the entire garment industry into a severe crisis. Moreover, production at most garment factories has been halted due to the countrywide shutdown.

Citing the example of China, the RMG association said the country had waived airport cargo charges to help businesses. 

The consequence of undelivered garment raw material is also reflected in the fall of export cargo that Biman experienced in April. 

In the first 10 days of April, export through air-cargo was 403 tonnes –down by 80 percent from the usual export trend before the coronavirus outbreak. 

Biman would see cargo intended for export reach 200 tonnes every day before the Covid-19 crisis, according to the company.

Over 80 percent of around 4,500 apparel factories have announced layoffs at their units after the shutdown was imposed, according to factory owners and labour leaders. They declared layoffs to reduce cost. 

Garment workers have become outraged by the layoffs, and have come on to the streets in protest, ignoring social distancing rules. 

To handle the situation, the government last week directed the Bangladesh Bank not to provide funds under incentive package of Tk5,000 crore to the export-oriented factories that have announced layoffs. 

The government formed the Tk5,000-crore fund to facilitate coronavirus-affected export-oriented industries so that workers in these sectors do not lose their jobs. The owners can receive loans at just 2 percent service charge, and pay wages to their workers for three months.