News / Garment exports face disruption following Bangladesh factory closures

12/09/2024

Garment exports from Bangladesh are likely to face delays, or cancellation, with hundreds of factories closed over a labour dispute.

Closures began last week in industrial districts near Dhaka. Today, according to the police, some 219 factories are closed in Ashulia, a major garment centre.

Many factories have been vandalised by the workers, to press home their demands, including a wage hike and better facilities. Yesterday one group set fire to a Big Boss Corp factory, after blocking roads.

The government yesterday formed a taskforce to discuss the labour issues and find ways to meet their demands. It also discussed forming a new wage board.

Shams Mahmud, vice president, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said the unrest has been causing significant losses to the industry.

“We incurred a similar loss following the political changes in July and August. Also floods in August came as another blow. The latest unrest is resulting in the loss of winter work orders,” said Mr Mahmud.

“We agreed to meet the majority of the demands raised by the workers. Despite that the unrest is continuing. We see outsiders’ instigation behind the labour unrest.”

Ruhul Amin Sikder, secretary general of the Bangladesh Inland Container Depots Association (BICDA) said the depots are receiving 15% fewer export trucks at the moment.

Some factories have also reportedly closed because of a lack of orders, while others have struggled to get raw materials.

Freight rates into and out of Bangladesh have risen fast in recent months. According to Xeneta, air freight spot rates form Bangladesh to Europe hit $4.95/kg last month, and $6.912/kg to North America, with load factors hitting 97%, attracting more ad hoc freighter services to the country. One source in Bangladesh claimed rates had hit $9 to the US, and $7 to Europe.

Airlines met authorities last week to request better services in the country, and cheaper handling.