RMG exporters aim to use Maldives routes to streamline supply chain

Business Report :

By bypassing traditional routes and leveraging the Maldives’ strategic location, Bangladesh aims to streamline its supply chain and expedite the delivery of goods to international markets, impact the regional trade landscape, and potentially affect the revenue streams of other countries involved in the textile trade.
This is why Bangladesh, a global textile powerhouse, has reportedly begun rerouting its textile exports through the Maldives.
Industry insiders claimed that they could save up to $1 per kilogram on shipping costs to European nations by using air freight through the Indian Ocean Island, which is roughly 2,800 kilometers from Dhaka.
The traditional air shipment routes through Dhaka, Kolkata, Colombo or Singapore had either become too expensive or too slow, exporters added.
The RMG industry was facing a substantial backlog in the wake of the student protests of July and August when everything had ground to a halt.
Shipment rates through Dhaka had climbed to $6.30–$6.50 per kg when Bangladeshi exporters stumbled upon the new route through the Maldives. It has now come down to $3.80–$4.10 per kg for shipping to Europe.

Notably, Dhaka’s Hazrat Shahjalal International Airport is expensive for exporters because of its high operational costs, levies, and operational hazards.
Bangladesh Freight Forwarders Association (BAFFA) President Kabir Ahmed stated that the Maldives airport route emerged organically due to the exorbitant costs associated with other shipping routes. The interim government’s restoration of order led to a surge in factory production, subsequently driving a significant increase in shipment demand.
The consequent backlog also had to be cleared quickly once operations resumed as exporters became desperate to meet their looming deadlines, many of which had presumably been extended considering the political situation.
“This new route gives Bangladesh a strategic advantage and improved reliability, which is crucial for meeting tight international deadlines,” Arun Kumar, president of the Association of Multimodal Transport Operators of India told The New Nation.
He added that garments are time-sensitive and any delay could lead to rejected consignments, as out-of-season deliveries lose their market value.
Regarding this, former BGMEA Director Mohiuddin Rubel said that freight forwarders are ultimately responsible for determining the optimal transportation route for goods. As these forwarders are typically nominated by the buyers, exporters have limited influence over the chosen route.
However, with the emergence of the Maldives route, freight forwarders may now consider utilizing both options to maximize efficiency and cost-effectiveness. This strategic approach does not necessarily exclude India but rather complements it to provide greater flexibility and adaptability in the supply chain.