More congestion threatens fashion supply chains

Increasingly popular textile sourcing origins in Southeast Asia look likely to face increasing port congestion as Ramadan and public holidays start to impact operations from later this month.

Adding to the current woes being experienced around Shanghai and Central China, textile and fashion supply chains are now threatened by congested container terminals in Myanmar and Bangladesh.

Increasing numbers of ports in Asia, critical to the fashion sector, are struggling to cope with congestion that is disrupting intra-Asia shipping of raw materials and imports of finished garments, with fears that delays could deteriorate further in the coming months when ports close for public holidays.

Like many ports across Asia, Bangladesh and Myanmar suffered from unprecedented seasonal and peak season demand that triggered the port congestion.

Chittagong port congestion

Chittagong port

Bangladesh’s seaport, Chittagong, particularly struggled to keep up with containerised traffic demand, with berthing delays running at 5-6 days through the 2nd half of 2016.

In 2017 berthing delays during the peak period – from May to November – are expected to still be around 5 days, which could increase to 7 or 8 days in late June and late August/early September respectively as ports work through Ramadan and close for major holidays in Bangladesh.

In contrast the port of Yangon in Myanmar has seen recent improvements and this week’s Water Festival was not so far causing too much of an impact.

Changes to liner alliance structures could also impact on the reliability of shipping services to and from Bangladesh, with serious implications for the UK’s fashion industry which relies heavily on product sourced in Bangladesh.

Yangon Port congestion

Yangon Port

Although congestion has largely cleared at Myanmar and Bangladesh, there is still a huge backlog of containers at transhipment ports such as Colombo, Singapore and Malaysia, which means it takes 2 to 3 weeks to get a Chittagong-bound feeder vessel after discharge from a mother vessel at transhipment ports.

The delays for imports and exports have seen some shippers turn to alternative services, using road to move raw materials and air or sea/air for European imports

Experts insist that the ports of Yangon and Chittagong have endured years of neglect and are in desperate need of investment in new port capacity and modernisation, if they are to stand any chance of catching up with the economic and trade growth that has has consistently outstripped their capacity.

If you currently source, or are considering sourcing from Bangladesh and Myanmar and have concerns about any of the issues raised in this article, please CONTACT us to discuss. We have a range of options to keep your supply chains operating efficiently from both origins.