RMG owners get waiver from demurrage of airport warehouse

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) got waiver of demurrage on keeping raw materials in the Dhaka airport warehouse for an extended period.

In response to a request from the BGMEA, the Ministry of Civil Aviation and Tourism took the decision. 

Biman Bangladesh Airlines, which is the authority to maintain the warehouse, was asked to take necessary steps in this regard, according to a letter from the aviation ministry. 

The cargo warehouse at Hazrat Shahjalal International Airport in Dhaka has become overfilled with imported garment raw materials because importers have stopped taking delivery since March due to a halt in production.

A total of 2,033 tonnes of imported raw materials were lying undelivered in the warehouse until April 20. But the warehouse has a storage capacity of 800 tonnes, thus creating a problem for Biman.

Biman says that a large portion of the undelivered raw material was imported by garment factories.

BGMEA President Rubana Huq, who was also unable to take delivery of raw material imported for her factories, sent a letter to Biman on April 7, requesting that the demurrage be waived.

Usually, cargo importers get three days to keep their raw material in the warehouse free of cost. Demurrage becomes applicable if they cannot take delivery of the goods within this period.

Biman initially charges Tk25 per unit for 10 days after the three-day period ends. Then it increases the charge to Tk100 for the next 10 days, and then to Tk300 for the 21 days after that. 

Although passenger flights have been suspended since the last week of March to curb the spread of coronavirus, cargo transportation has remained normal. 

The consequence of undelivered garment raw material is also reflected in the fall of export cargo that Biman experienced in April. 

In the first 10 days of April, export through air cargo was 403 tonnes, down by 80 percent from the usual export trend before the coronavirus outbreak. 

Biman would see cargo intended for export reach 200 tonnes every day before the Covid-19 crisis, according to the company.

Over 80 percent of around 4,500 apparel factories have announced layoffs at their units after the shutdown was imposed, according to factory owners and labour leaders. They declared layoffs to reduce cost. 

Garment workers have become outraged by the layoffs, and have come on to the streets in protest, ignoring social distancing rules. 

To handle the situation, the government last week directed the Bangladesh Bank not to provide funds under incentive package of Tk5,000 crore to the export-oriented factories that have announced layoffs. 

The government formed the Tk5,000-crore fund to facilitate coronavirus-affected export-oriented industries so that workers in these sectors do not lose their jobs. The owners can receive loans at just 2 percent service charge, and pay wages to their workers for three months.