Shipping
POLITICAL TURMOIL IN BANGLADESH CAUSES MAJOR DISRUPTIONS IN LOGISTICS
August 6, 2024
The recent political turmoil in Bangladesh has significantly impacted logistics across the country.
Judah Levine, head of research at Freightos, said in a new analysis that the situation, which escalated with student protests and violent police responses since early June, culminated in the resignation of the Prime Minister on August 5.
He added that the protests and the government's countermeasures, including internet shutdowns, curfews, and manufacturing shutdowns, have caused widespread disruption.
Levine noted that the turmoil had halted garment manufacturing, caused transport disruptions, and shifted port backlogs to the air.
"A three-day commercial shutdown has brought the country’s garment manufacturing to a standstill," he said, adding that rail services are suspended until further notice, border closures have created truck backlogs on either side of crossings with India, and the Dhaka airport remains closed until at least late Monday as the army seeks to restore order.
"The protests have led to container backlogs at the Port of Chittagong over the course of the weeks of protests. Ocean costs have risen, pushing some exporters to shift to air cargo," Levine said.
Meanwhile, the Freightos analysis also noted rate increases in ocean container rates due to the turmoil.
Levine cited Freightos Terminal data showing that export ocean container rates have been climbing since the disruptions began in June.
He noted that rates to the US are now over 40% higher than two months ago, reaching about US$8,650 per 40' container. Rates from Chittagong to Rotterdam have increased nearly 170% to approximately US$7,000 per container.
"Continued backlogs and delays will mean shippers will face additional storage costs for waiting containers and could lead to more rate increases, with some carriers already announcing mid-month increases," Levine added.
