In a recent statement, German Supply Chain Management (SCM) solutions specialist Setlog has warned that the recent political turmoil in Bangladesh, marked by violent riots and the collapse of the government, is causing significant disruptions in the global fashion supply chain, with industry experts predicting long-term consequences for both importers and consumers.
Bangladesh, a key player in the global textile industry, faces a crisis that could lead to higher clothing prices worldwide. Steffen Guenner, Managing Director of Purchasing at Bay City, a service provider in the fashion industry, forecasts that the unrest will result in a noticeable increase in fashion prices by mid-2025. Despite some industry representatives downplaying the severity of the situation, Guenner stresses that the impact is inevitable, stating, “Fashion prices will rise by mid-2025 at the latest.”
The situation on the ground in Bangladesh is dire. Although factories have resumed operations following a government-mandated shutdown, significant supply chain disruptions persist. Setlog’s Managing Director, Ralf Duester, confirms that goods are facing delays of up to three weeks due to congestion at Bangladeshi customs. These delays are largely due to unfilled vacancies within the transitional government and extensive damage to infrastructure caused by recent violence. Consequently, only about 75 percent of the workforce is currently able to report to work, further exacerbating production delays.
Bangladesh factory owners are under immense pressure as they struggle to meet production schedules. These delays, increased transportation costs, and a substantial wage hike implemented just months ago create a cash flow crisis that many factories may not survive. Guenner highlights that the industry has not fully absorbed the 56.25 percent minimum wage increase, coupled with rising energy costs and inflation. The resulting financial strain could lead to more strikes and further disruptions in the supply chain.
Setlog, whose SCM software OSCA is utilized by Bay City and other fashion brands, is closely monitoring the situation. Duester warns that Bangladesh risks losing its status as a key production hub for the European market if the situation does not improve soon. This potential loss would be a significant setback for global sustainability efforts, as Bangladesh has made considerable progress in this area since the Rana Plaza disaster, positioning itself as a leader in sustainable fashion production.
The current crisis raises concerns about the future of Bangladesh as the “sewing factory of Europe.” Importers who prioritize sustainability are now faced with the difficult decision of whether to continue relying on Bangladesh or to seek alternatives. Duester emphasizes that abandoning Bangladesh could undermine climate goals and disrupt the supply of sustainable fashion, which has become increasingly important to consumers.
As the situation evolves, Setlog emphasizes that it remains committed to supporting its clients in navigating these complex challenges.
