Ctg depot fire: Garment owners fear huge loss, supply chain disaster

Santex Knitwears Ltd, a garment factory in Chattogram, sent 29,000 pieces of jackets to BM Container Depot for export to America and Canada. The consignment, valued at $3,50,000, was waiting at the depot for shipping.

AKM Mohammad Alamgir, managing director of Santex Knitwears Ltd, is worried about the fate of his products and payments for that matter.

On Saturday night, the container depot in Chattogram's Sitakunda caught fire from a massive chemical explosion. At least 49 people were killed and more than 200, including cops and fire service personnel, injured in the fire that could not be put out till filing this report on Sunday night.

In addition, a large number of containers, carrying various export goods including apparel, were gutted in the fire, triggering grave concern among exporters.  

Garment owners sell products on a Free on Board (FOB) basis. In this method, the responsibility of the exporter ends when the export goods are handed over to the freight forwarder agent. Then the cost of product delivery, and associated risks are borne by the buyers.

As the export goods were damaged at the depot before shipment, there is uncertainty among the garment owners about payments.

In this regard, Khairul Alam Sujan, vice-president of Bangladesh Freight Forwarders Association (BFFA), said, "Export goods are protected under insurance. Thus, garment owners are likely to receive compensation in case of any damage. The supplier, insurance company, and foreign buyer will have to negotiate a deal for the compensation."

"Around 4,300 containers were reportedly damaged by the fire. The amount of time and money required to repair the depot is uncertain. The coronavirus pandemic has already hampered exports and imports, which will now be amplified by this incident. But, exports will take the biggest hit," he said.

The estimated financial loss caused by the deadly fire might cross $110 million, according to Bangladesh Inland Container Depots Association (BICDA).

Rakibul Alam Chowdhury, vice-president of BGMEA, said, "We are certain that the apparel products made by 8 industrial groups in Chittagong, worth $18 million, were damaged in the fire. The affected companies are- KDS Group, Asian Apparels, Four H Group, Pacific Jeans, Santex Knitwears Ltd, Arrow Fabrics, and Sea Blue Textile. The extent of damage has not been determined yet."

Syed Mohammad Tanvir, vice-president of the Chittagong Chamber of Commerce and Industry and managing director of Pacific Jeans Ltd, said, "It was a very unexpected incident. Our products were supposed to go to Europe and America. However, we have not yet been able to determine the extent of the damage. This is a big setback for us."

The inland container depots (ICDs) should follow compliance in the same way that garment companies follow, he added.

Managing Director of Four H Apparels Ltd. and Director of BGMEA Md Hassan (Jacky) said, "Our export containers are kept in depots for shipping to Europe and America. Export products of the famous brand H&M were stored at the depot. We are very worried about the losses incurred by the fire."

Reportedly, over 800 TEUs (Twenty-Foot Equivalent Units) of containers loaded with export items - mainly RMG products and frozen foods – around 500 imported goods-laden containers and 3,000 empty containers went down in flames on the Saturday night fire, said Bangladesh Inland Container Depots Association (BICDA) Secretary General Ruhul Amin Sikder.

Sakeef Ahmed Salam, deputy managing director of Asian Apparels Ltd, said, "Our export goods, worth $1.6 million, reached the BM Container Depot on Saturday. Those were supposed to go to America. Now we know nothing about these products."

"If these products do not reach the buyer, we will face huge financial losses. If the buyer asks to make this product again, there will be big problems in collecting the raw material again," he added.

In Bangladesh, there are 19 Inland Container Depots (ICD), also known as off-dock, which handle almost 100% of export goods for shipments and 38 types of import goods - including food items like rice, wheat, mustard seed, chickpeas, pulse, and scraps. 

The ICDs work to help ease congestion at Chattogram port and facilitate the quick clearance of FCL (Full Container Load) cargo by allowing unloading or delivery from outside the port area.

These ICDs have a capacity of holding 76,255 TEUs containers while Chattogram port yard has the capacity for 49,018 TEUs.