KARACHI, Oct 22: Exporters of value-added textile goods are seeking freight subsidy on export consignments being airlifted so that they can make up for delays in meeting shipment schedules caused by an exodus of workers from Karachi to their homes in the quake-affected areas.
At present most of the industrial units in the city are working at 60 per cent of their capacity because of the shortage of workers.
Most of the skilled or unskilled workers in six industrial areas of the city belong to the northern areas and Azad Kashmir. However, the earthquake forced a large number of industrial workers to rush back their home, thereby adversely affecting the industrial production and export commitments.
Though almost all the sectors are presently faced with a shortage of industrial workers, the value-added textile sector, which employs a large number of workers, is the hardest hit and is facing difficulty in meeting export commitments.
In order to meet shipment schedules and save L/Cs opened in their favour by foreign buyers, many industrial units and export houses are airlifting the consignments, thereby incurring higher freight costs. However, this could not be done for an indefinite period because there is a huge difference between air and sea freight charges.
Trade bodies of the value-added textile sector have taken up the issue with the government and are seeking freight subsidy on their consignments. There is a strong feeling among exporters that if the government does not come up with some relief many industrial units will collapse.
While appreciating Commerce Minister Humayun Akhtar Khan’s efforts to get a duty-free access to the EU market under the GSP plus rules, business leaders feel that the government in the meantime should come forward and save the industry that could not sustain with high air freight charges.
In a communication to the commerce minister, Pakistan Bedwear Exporters Association Chairman Shabir Ahmed raised this issued and informed the minister that a large number of workers hailing from Azad Kashmir and Hazara had left for homes to see their relatives affected by the deadly earthquake.
This exodus has created an acute shortage of workers in the industry that is presently suffering from production loss and facing difficulties in meeting export commitments, he added.
Mr Ahmed said that due to a sudden departure of a large number of skilled switching and tailoring workers, the production in almost all the value-added textile units had reduced to 60 per cent. Consequently, the industry is compelled to make shipments by air to meet the delivery schedules of buyers who supply their goods to supermarkets, departmental stores, hyper stores and mail order departments.
He said further that there was a huge difference between freight costs of sea and air, as bedwear exporters had to pay 10 times more for air freight. Citing an example, he said that the sea freight for a piece of bed sheet was only Rs15, compared to Rs100 for the same item sent by air.
Mr Ahmed said that EU importers had refused to share the extra freight cost because they were already paying 12 per cent customs duty on imports and 13.1 per cent anti-dumping duty on exports from Pakistan.
Sultan Ahmed, former chairman of the Pakistan Hosiery Manufacturers Association, said that currently the biggest problem was a shortage of industrial workers. He said at present most of the industrial units were suffering from production loss and are not in a position to meet their export commitments. “In order to save some of L/Cs and export contracts, exporters are sending their goods by air.”
But he said that this could be done on a limited scale, therefore, the government should come forward and resolve the issue.
Bilal Mulla, Chairman of the Pakistan Readymade Garments Exporters Association, said the government beside looking into freight subsidy, should also take up the issue with the EU to have a GSP plus status at the earliest so that the industry could be saved and more jobs could be created.
