There is immense potential for trade growth between Bangladesh and India due to the bi-lateral coastal shipping agreement, but the restrictions on transhipment is a hindrance. Panellists opined Bangladesh exports should be allowed to be transhipped via any of the ports on the east coast of India which are naturally close to the country.
Speakers for the Business Session 3 were Ahamedul Karim Chowdhury, Terminal Manager, Chittagong Port Authority, & CEO, PICT; Capt Rakesh Prasad, VP, Shreyas Shipping & Logistics; Amlan Basu, Director, AVS RiverLine; Capt Bijay Shekhar, General Manager – Marketing, Krishnapatnam Port Container Terminal; and the session moderator was Capt. S.B. Mazumder, Chairperson, Shipping Committee, the Bengal Chamber of Commerce and Industry. Excerpts from the panel discussion….
Ahamedul Karim Chowdhury: The objective behind setting up of Pangaon Inland Container Terminal (PICT) was to reduce vehicle traffic on Dhaka-Chittagong highway. Chittagong Port is the principal port in Bangladesh catering to about 92 per cent of seaborne cargo volume, out of which 70 per cent cargo belongs to Dhaka. The highway connecting Chittagong and Dhaka is about 264 km, and only 4 per cent of containerised cargo is moved by rail from the port to Dhaka, and a very nominal volume is transported through inland waterways, and remaining cargo moves by road. PICT has gained traction after the terminal tariff was reduced. Bangladesh imports 30 per cent of its total raw cotton requirement from India, and half of the commodities are moving through Petrapole-Benapole border checkpoint and other land ports. And remaining cargo is moving through Chittagong Port. Bangladesh is keen on direct vessel service between PICT and Kolkata/Haldia.
Trade imbalance is a challenge because there are imports from Kolkata but export is limited. Both the countries have agreements on coastal shipping but it only allows movement of bilateral cargo, which means no movement of transhipment and third country cargo. Pangaon is getting imports from China by MCC but the shipping line doesn’t have any network in India. Kolkata and Haldia trade have been reiterating that shipping lines are not accepting PICT imports, which is big challenge for PICT. Though Bangladesh is a major exporter of readymade garment but it lacks forward and backward linkage for which it imports raw material like cotton, cotton yarn and fabric from India. PICT’s proximity to Dhaka is an advantage for the terminal. Recently, during the inauguration of Haldia-Pangaon maiden service, the Riverline Express, it was proposed that if Bangladesh exports could be shipped to Europe via Haldia and transhipped from Colombo, exporters can avoid congestion at Chittagong. It will boost cargo volume for Haldia Dock and Bangaldesh’s import backlog at Colombo can come through Haldia. So India and Bangladesh need to review the coastal shipping agreement and add the provision to move transhipment cargo by coastal vessels.
Arvind, a major supplier of fabrics, has expressed interest to move cargo via Pangaon but factories in Bangladesh want shipment by road through Petrapole-Benapole which has 20-25 days of detention. On the other hand many mainline vessel operators are accepting cargo destined to Chittagong but hesitant for Pangaon. Mainlines should encourage vessel operation between east coast ports of India and Pangaon.
Amlan Basu: Significant usage of the Protocol on Inland Water Transit and Trade (PIWTT) route increased water transport trade for various bulk commodities between the two countries. Over the years cargo movement has diversified from fly ash to agricultural goods and other break bulk cargo like engineering machinery and project cargo meant for upcoming projects in Bangladesh like Rampal Power Station and Rooppur project where rail has been avoided for EPC cargo. Both the countries have signed a coastal shipping SOP to create better connectivity between 7 ports each from the territory which have been identified to be treated as coastal ports to serve coastal flagged ships. The new route depicts a smoother coastal route via Sandwip through Buriganga river and connect to Dhaka via Pangaon terminal. Riverline was the first container feeder service between an Indian Port and Pangaon. The cargo generated from the hinterland of western parts of India, especially NCR and NER, and other southern part of India moving by surface transport to Kolkata and Bangladesh could also be served by coastal shipping. North East also has potential but the region requires smaller quantity of cargo and it doesn’t require a barge of 1,000-1,200 tonnes and most of the industries there are SME and MSME category. Ashuganj has infrastructure bottlenecks, hence Pangaon, located 133 kms from Akhaura border, could be an alternative Port to serve the region where smaller parcel of as little as 1 CBM could be moved in LCL form. The major areas of concern are trade imbalance and there is no return cargo due to regulatory issue. Only Bangladesh flagged ships operate on the Indo-Bangladesh route. The route is not viable from techno-commercial point of view for Indian ships because the capex is very high as compared to Bangladeshi ship after the revocation of ship building subsidy in India. India also lags in custom built vessel building capacity.
Capt Rakesh Prasad: Shreyas Shipping & Logistics has deployed 6 vessels catering to the Kolkata/Haldia trade. The company is the largest containerized company to offer service from the east coast of India to Jebel Ali. There are 4 services named PIX 1, PIX 2, SMILE and ECC catering to the trade. The company had procured 2 break bulk carriers in 2017. Transhipment services were also on offer on regular basis between Kolkata and Visakhapatnam, and now vessels were running between Krishnapatnam and Kolkata/Haldia for transhipment cargo. There are issues due to delay in turnaround and berthing at the port which also pose challenge to transhipment cargo. Ports need to understand that coastal vessels have to be given priority. Coastal operating vessels can’t adjust speed of the ship which is not the case with regular vessels. There are plans to run barges between Kolkata and Haldia during heavy congestion which will ease out some load on Kolkata Port. There should be dedicated coastal berths for Indian flagged vessels for the sustainability and growth of the segment.
Capt Bijay Shekhar: Apart from Krishnapatnam Port, the group company has plans to develop 2 new ports at Machilipatnam in Andhra Pradesh and Astaranga in Odisha. Krishnapatnam Port always develops its infrastructure in advance to avoid any type of congestion. The port has also introduced a new service named, Ocean2Door, to cater to the need of seamless cargo delivery experience for shippers. The platform is for the use of all stakeholders, and it caters to all cargo variety and offers solution for end-to-end logistics service. In the current era, service providers needed to be transparent on tariff charged for various services and offer accountability for timely and hassle-free cargo delivery, and Ocean2Door aims to address these issues through a digital platform. With the support of other industry partners the port has started serving coastal and transhipment cargo. Initially Krishnapatnam started with a transhipment cargo volume of 5,000 TEUs and now it is 20,000 TEUs per month. In a bid to encourage coastal shipping, the port has a dedicated coastal container berth at the port which allows vessels to berth without any delay. The port that is planned at Astaranga in Odisha could be strategic to bring in north east and other east bound cargo to the port and move forward to north India because east coast is geographically closer. For example, earlier Nagpur which is centrally located used to move even the east bound cargo through JN Port but Krishnapatnam Port offered an efficient solution as it is closer to the East Asian countries. Ports should always looks to make freight movement cost effective for shippers, and the final decision always lies with them to chose the right port for their cargo.
