Bangladesh has been engulfed in widespread protests for over a month, triggered by dissatisfaction with the civil service exam system.
The unrest reached its peak on August 5th when Prime Minister Sheikh Hasina, after 15 years in power, resigned and fled the country. A temporary government was quickly established on August 6th.
As reported, the violent nature of the protests has led to significant loss of life, with 413 deaths and over 11,000 arrests. The situation remains tense, with no immediate resolution in sight.
Shipping Disruptions at Chittagong Port
The ongoing turmoil has caused severe disruptions to shipping operations in Bangladesh.
The most significant impact has been felt at Chittagong Port, the country’s primary gateway for international trade, handling over 90% of its import and export activities.
In detail, the port is experiencing unprecedented congestion, with around 50 ships queued within a 25-nautical-mile radius and 41,000 TEUs of containers already docked. These shipping disruptions have resulted in some of the worst berth delays globally, with vessels now waiting over a week to offload and load cargo.
International shipping companies and freight forwarders are facing considerable delays, disrupting supply chains across various industries.
What’s worse, the protesters’ blockage of key highways has further exacerbated the situation, bringing the movement of goods to a near standstill in Bangladesh.
Economic Consequences of the Protests
Bangladesh has experienced rapid economic growth in recent years, becoming South Asia’s second-largest economy and a significant player in the global apparel export market.
However, the current political and social unrest has severely impacted this growth trajectory. The global economic slowdown has already led to a reduction in export orders, and the ongoing protests have made it even more difficult for companies to meet existing commitments. The disruption in communications with Bangladeshi clients since July 18th has further complicated trade operations.
The protests have also led to a severe shortage of foreign exchange in the country, further straining businesses that rely on international trade.
According to estimates, the economic losses from the protests could exceed $10 billion. Moreover, international agencies have downgraded Bangladesh’s credit rating, potentially deterring future investments.
Navigating the Challenges: How to Manage Shipping Risks During Bangladesh's Unrest
For companies involved in international trade with Bangladesh, the current situation presents significant challenges. With the country’s foreign exchange control regulations mandating the use of bank letters of credit for most international transactions, businesses must exercise caution.
The potential for delays in document submission and payment processing due to the unrest is high, and companies must be proactive in managing these risks to avoid substantial losses.
Engaging with reliable freight forwarders who are adept at navigating such complex scenarios can help mitigate the impact of these disruptions.
We at ASLG have developed contingency plans to reroute shipments through alternative ports and transport hubs when possible. By leveraging our extensive global network, we aim to minimize delays and keep supply chains moving despite the disruptions.
Future Outlook
Despite the current challenges, there is hope that Bangladesh can regain its economic footing once political stability is restored. The country’s strong labor force and ongoing infrastructure improvements remain key assets that could support a swift recovery.
However, the path to stability is uncertain, and much will depend on the actions of the newly formed government and its ability to restore order and confidence among investors and trading partners.
For now, businesses must remain vigilant and adaptable, ready to respond to the rapidly changing landscape in Bangladesh and its implications for international trade and shipping.
