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Garment exporters are feeling the pinch of exorbitant transport fares as the rebound in the shipment of goods thanks to the reopening global economy has raised the demand for trucks and covered vans.
Truck and covered vans with a capacity to carry six to seven tonnes of goods are charging as much as Tk 20,000 and Tk 25,000 respectively to take apparel items from Dhaka and its adjacent areas to the Chattogram port.
The cost even went up to Tk 30,000 and Tk 40,000 before Eid festivals when there was a rush to ship goods.
In normal times, the fare ranges from Tk 10,000 to Tk 12,000.
Because of the abnormal hike in carrying costs, apparel exporters, especially small and medium enterprises, are in big trouble as it adds an additional financial burden.
Garment exporters say at a time when the cost of production has gone up, the excess transport fares have added further woes. But international retailers and brands are not paying increased prices for the goods exported.
“Over the last three months, the fare has been very unstable because of lockdowns, Eid vacation and shortage of containers in the port,” said Ahmed Fazlur Rahman, chairman of Kappa Fashion Wear Ltd. As a result, the demand for trucks and covered vans was unusually high.
“For instance, I sent goods in a truck spending Tk 60,000 because of emergency shipment before Eid,” Rahman said.
Before the Eid festival, the demand for covered vans went up, and the transport companies exploited the situation, Rahman said.
Bakhtiar Uddin Ahmed, chief operating officer of Fakir Apparels Ltd, said after the Eid vacation, he spent Tk 30,000 to Tk 35,000 to move goods from his Narayanganj-based factory to the port.
Usually, the fares vary between Tk 12,000 and Tk 15,000, he added.
Abdul Hannan, a manager of Edo Mia Transport Agency, admitted that the transport fares surged because of the increasing demand.
Moreover, there was a congestion of vessels in the port a few weeks ago. As a result, many covered vans and trucks were stuck in the port areas for some days.
“Sometimes, goods-laden trucks and covered vans remain stuck for four or five days due to the congestion.”
Most of the increase in the fares occurred after Eid-ul-Fitr, said Hannan, adding that the fare reached Tk 30,000 per covered van from Tk 14,000.
He blamed the abnormal traffic congestion for the higher transport cost.
Sometimes, the fare declines when the unloading of goods at the port slows in line with a lower import of goods, he added.
AM Transport now charges between Tk 20,000 and Tk 25,000 per covered van for transporting goods from Dhaka to Chattogram port, up from Tk 13,500 to Tk 14,000 before the latest lockdowns, according to its owner Mohammad Jasim Uddin.
Some 70,000 cargo-carrying trucks and covered vans ply between Dhaka and Chattogram.
“When the demand rises, we charge a higher fare. The fares are mainly dependent on the volume of import and export of goods,” said Mokbul Ahmed, president of the Bangladesh Truck Van Transport Agency Owners Association.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said the cost of production had gone by up to 30 per cent over the last eight years for various reasons.
“Now the higher transport costs have added to the woes of the garment exporters.”
Both import and export costs have risen as the sea freight rate remains elevated because of an acute shortage of empty containers and a rise in demand globally.
The freight charge between Chattogram port and Shanghai port has risen by 400 per cent. As a result, most freighters are charging between $4,000 and $4,200 for a 40-foot container, which was $1,000 and $1,200 previously, according to Syed Nurul Islam, a director of the Bangladesh Textile Mills Association.
“The cost of shipping has risen abnormally as demand has gone up because of the rebound of the global economy.”
Mostofa Azad Chowdhury Babu, senior vice-president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said nobody had informed the apex trade body about the unusual transport fare hike.
“If anybody lodges complaints with the FBCCI, we will call a meeting to discuss the issue to resolve it,” he said, adding that the fares were coming down gradually because of the withdrawal of the lockdown.
(TDS)
