Bangladesh is currently grappling with one of the most severe natural disasters in recent memory, as flash floods devastate 77 upazilas across 11 districts. This calamity has not only displaced thousands of residents but has also caused significant disruptions to the country’s economic lifeline: the ready-made garment (RMG) sector. As the world’s second-largest clothing exporter, Bangladesh’s RMG industry is crucial to its economy, contributing 84.58% of the country’s total export earnings in the fiscal year 2022-23. However, the recent floods have severely hindered the sector's operations, threatening its ability to maintain global competitiveness.

Disruption of Supply Chains and Logistical Challenges

The floods have had a crippling effect on the logistics that underpin the RMG sector. Chattogram port, the country's primary export gateway, has been effectively cut off from the rest of Bangladesh. The port is crucial for handling the majority of the country’s garment exports, but the flooding has caused a backlog of containers and jeopardized the timely shipment of goods. The situation is further exacerbated by the disconnection of both rail and road links between Dhaka and Chattogram, which are vital arteries for the movement of raw materials and finished goods.

Md Absar Hossain, Managing Director of Top Star Fashions Ltd and a Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in Chattogram, underscored the urgency of the situation: “The flooding on the Dhaka-Chattogram highway, particularly in areas like Feni and Cumilla, has rendered vehicle movement impossible. This has led to a significant pile-up of goods meant for export, causing financial losses. We urgently require government intervention to clear the water from these highways and restore normal operations.”

Rising Costs and Strategic Responses

The timing of these floods could not have been worse for the RMG sector, which was already navigating challenges from previous disruptions, including a month-long student movement that affected production schedules. The current crisis has escalated costs for exporters, who are now being pressured by international buyers to use costly air freight options to meet deadlines.

Md Mohiuddin Rubel, Additional Managing Director of Denim Expert Limited and a BGMEA Director, highlighted the increasing financial strain on the sector: “The floods have compounded our difficulties, leading to escalating costs and potential reputational damage with our buyers. We must look at long-term strategies to mitigate such risks, including the development of alternative transportation routes and the strengthening of our crisis management protocols.”

In light of these challenges, industry leaders have called for the utilization of alternative routes to mitigate the impact on exports. Mohammad Hatem, Executive President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), proposed leveraging the Pangaon river port and Mongla port as backup options to ensure the continuity of exports. "The use of Pangaon and Mongla ports could be a viable solution to the current impasse, allowing us to fulfill our commitments to international buyers and avoid substantial financial losses," Hatem noted.

Government Intervention and Strategic Planning

Given the magnitude of the crisis, there is a pressing need for coordinated government intervention. The BGMEA and BKMEA have both urged the government to act swiftly in restoring transportation links and clearing flooded highways. Additionally, the industry is advocating for the development of a more resilient infrastructure that can withstand such natural calamities in the future.

BGMEA President Khandoker Rafiqul Islam has voiced hope that the government’s efforts will soon restore transportation on the Dhaka-Chattagram highway, enabling the resumption of normal business activities. He emphasized the importance of strategic planning in the face of recurring natural disasters, which are likely to become more frequent due to climate change.

Ensuring Global Competitiveness Amid Adversity

Despite the current setbacks, Bangladesh’s RMG sector remains committed to maintaining its position as a global leader in apparel manufacturing. The resilience of the industry, combined with timely government support and strategic planning, will be critical in navigating this crisis. The sector’s ability to adapt to these challenges will determine its future trajectory and its capacity to continue contributing significantly to the national economy.

In conclusion, the recent floods have exposed the vulnerabilities of Bangladesh’s RMG supply chain, underscoring the need for a more robust and adaptable infrastructure. The collaborative efforts of RMG exporters, industry associations, and government bodies will be essential in overcoming the current challenges and securing the sector’s future.

References

1. "RMG Supply Chain Disrupted by Flood." New Age Bangladesh, August 2024. https://www.newagebd.net/post/apparel/243477/rmg-supply-chain-disrupted-by-flood

2. "RMG Exports Suffer Setbacks as Severe Floods Cut Off Transport Networks to Chittagong." Apparel Resources, August 2024. https://apparelresources.com/business-news/trade/rmg-exports-suffer-setbacks-severe-floods-cut-off-transport-networks-chittagong/

3. "RMG Exports Facing Setback as Floods Disrupt Transport of Goods." The Business Standard,August 2024. https://www.tbsnews.net/economy/rmg-exports-facing-setback-floods-disrupt-transport-goods-923836