Myanmar apparel makers have warned that a ban on moving lorries and trucks to seaport terminals through the busy streets of Myanmar’s commercial capital Yangon has placed a heavy logistical burden on the country’s growing clothing sector.
Dr U Aung Win, a factory owner and deputy chairman of the Myanmar Garment Manufacturers Association, told just-style it has been particularly hard for bigger companies with three or four factories, as they have complicated logistics requirements.
Factories located in industrial zones also have a particularly tough time persuading labourers to work at night for loading and late manufacturing shifts, although it is somewhat easier for factories such as Win’s that are near villages. His Maple Trading Co Ltd plant is located in Mingalardon, north west of Yangon.
Night-time operations “also decreases the flexibility possible for transport”, says Win, whereas previously truckers had more time and options to make deliveries. Restricting them to nighttime operations from 9pm to 6am makes them less adaptable.
Costs have increased as a result, with increased congestion at ports, making it more likely that containers are held up for processing, delaying shipments.
The idea of the ban, instituted by the Yangon region government was to reduce chronic traffic daytime traffic congestion in Myanmar’s largest city.
But the actual result was logistical chaos. An estimated 85% of Myanmar’s ocean trade passes through Yangon’s ports, which are either located downtown or in the eastern area of Thilawa. Reaching both locations from the main industrial zones in the northwest of the city requires travelling through downtown Yangon. On the first day of the ban, traffic on major roads near the ports were snarled up, with lorries essentially halted for hours, with some drivers abandoning their vehicles. Businesses are adapting to the rules, but logistical problems and night time traffic jams remain.
These challenges worsen an already difficult logistics situation in Myanmar.
Of Yangon’s 33 wharves, 23 are at downtown ports located near some of the busiest stretches of the city. Another ten are at Thilawa, which is the site of a new Special Economic Zone and hence also busy.
Yangon’s ports are also located at the head of the Yangon river estuary, restricting the size of vessels that can dock. Customs processing must be handled on site as there are no dry ports at which paperwork can be completed in advance. This contributes to the gridlock, particularly during periodic security and smuggling controls, when more containers are closely checked.
“Importing raw materials is a big headache for us,” said one Myanmar clothing factory owner, who requested anonymity. “Sometimes the rules the customs department uses don’t make sense. They also don’t listen, even to other government departments.”
Some executives have pointed to the need for closer co-ordination between various government departments.
Prominent agri-businessperson U Ye Min Aung, who has bee involved in running the Pathein industrial zone, which includes clothing factories, has said it would be “helpful” if Yangon regional government, and the National Ministries of Commerce and of Transport sat down to figure out logistics and transport.
Currently exporters feel that government policy is slowing them down, though some efforts are being made, such as the purchase of a Japanese-funded electronic customs clearance system, due for implementation this year.
Meanwhile, some manufacturers are considering avoiding Yangon’s streets altogether. Roughly one-third of Myanmar’s garment factories are clustered in Hlaing Tharyar, a northwest township of Yangon. It is also close to the Hlaing river, a tributary of the Yangon river, and manufacturers told just-style there was talk of establishing a short-hop shipping service between the Hlaing Tharyar industrial areas and the Yangon ports further to the south and east.
Various infrastructure plans have also been proposed by municipal politicians connecting the southeast ports through road bypasses that avoid the city centre. However, they appear to be years from coming to fruition.
For the time being, factories in Myanmar’s burgeoning garment industry will continue to face logistical headaches getting product to port.
Source: Just Style
