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Alert for Bangladesh RMG exports as shippers suspend operations on Suez Canal

Alert for Bangladesh RMG exports as shippers suspend operations on Suez Canal

Alert for Bangladesh RMG exports as shippers suspend operations on Suez Canal

The suspension of operations by major shippers on the Suez Canal, a key route to Europe, following a missile attack on a vessel, is causing concerns for Bangladesh’s garment exports.
Earlier on 15 December, a Liberian-flagged vessel “MSC Palatium III”, en route from Mombasa to Jeddah, fell victim to a missile attack on the Red Sea allegedly by Houthi militants in Yemen’s Bab al-Mandab Strait.

The attack on a vessel in the Red Sea has led to the temporary halt of shipping through the Suez Canal by major companies like MSC, Hepag Lloyd, and CMA CGM. For Bangladesh, whose apparel exports exceeded $46.99 billion in the fiscal year 2023, the disruption in the Suez Canal route poses challenges in timely transportation to Europe, which accounts for 51% of overall trade.

Syed Nazrul Islam, the first vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted that an alternative route would inevitably result in delays in shipping Bangladesh’s garment products to Europe.

“Furthermore, the additional transportation costs will likely be borne by the buyers, adding financial strain to an already challenging situation,” he added.
The surge in fuel costs is expected to contribute to an increase in freight charges.

The situation is expected to result in delays and increased transportation costs, impacting the garment industry already facing challenges. The closure of the Suez Canal adds complexity to the global trade landscape, compounding issues arising from geopolitical conflicts like the Russia-Ukraine war.

As major shipping companies reroute vessels away from the Red Sea region, the incident underscores the vulnerability of the interconnected shipping network and its potential impact on economies worldwide.

#News #Textile

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