November 30, 2020: Feeder vessel operators have imposed a surcharge on carrying containers between Chattogram and hub ports, saying severe congestion at the hubs is resulting in overstays and an increase in operational costs.
The surcharge has been opposed by readymade garment exporters who have demanded its withdrawal as it would increase their costs and subsequently harm Bangladesh’s main export item.
The “emergency cost recovery surcharge” is $75 for each goods-laden container and $37.50 for an empty one.
The feeder operators, connecting hub ports such as those in Colombo, Singapore and Malaysia, said the surcharge had come into effect on November 15.
They informed their clients, liner operators and container owners, about the change earlier through letters, citing that the congestion was reducing productivity and causing hardship, leaving them with no other option.
One letter, issued by Intermodal PTE, the agent of Samudera Shipping Line on November 5, informed that the delays at several ports were pushing up operating costs.
It said imposing the surcharge had become imperative for the recovery of costs and ensuring seamless service.
Far Shipping Lines PTE, another operator running vessels between Chattogram and Colombo, in its letter issued on November 23, stated that their stay at the port had increased by several days.
Recently, vessels have to stay at the port for eight to 16 days, said sources, adding that under normal circumstances, it should not be more than one or two days.
One of the Far’s container vessels, Kapitan Maslov, reached the Port of Colombo on November 9 and was able to depart on November 24.
Another vessel, Kapitan Afanasyev, had to stay for eight days before being able to leave for Chattogram on November 22.
In case of the ports of Singapore and Port Klang in Malaysia, the stay time has gone up by two to three days, alleged shipping agents.
Ajmir Hossain Chowdhury, assistant general manager of Marco Shipping Company, the local agent of the Far, told The Daily Star that the congestion was increasing fuel costs.
Each tonne of fuel cost $370 to $380 against the previous $260 to $270, he informed. Long periods of the pandemic-induced lockdowns and a shortage of labourers are the reasons behind the congestions, he said.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) First Vice President MA Salam termed the surcharge illogical and unacceptable.
In two separate letters sent to the chairman of the Chattogram Port Authority (CPA) and the president of the Bangladesh Shipping Agents Association (BSAA), the trade body said they were already struggling hard to recover from the losses caused by the pandemic.
The readymade garment sector faced cancellations of work orders worth around $3.8 billion as of October due to the global pandemic, said Salam.
He said the exporters would lose competitiveness in the global market since the surcharge could raise import costs of raw materials while buyers might decrease their offer rates for products.
He sought steps from the BSAA.
BSAA President Ahsanul Huq Chowdhury said they had nothing to do about it since feeder operators were realising the surcharge from the liner operators and container owners.
Each day of overstay costs the vessels $10,000 on an average in the form of operational costs, he said.
Once the situation at the hub ports improves, the feeder operators will withdraw the surcharge, he said.
Source: The Daily Star
