Urgent appeal for a comprehensive reevaluation of the increased tariffs at the Chittagong port by freight forwarders
The shipping sector in Bangladesh is facing financial and operational pressures following the revision of tariff structures at Chattogram port, which took effect on 15 September 2021. The Bangladesh Shipping Agents Association (BSAA) has expressed deep concern over the abrupt rollout of the new tariffs, urging the shipping ministry for a review.
Rear Admiral M. Ashraful Hoq, the Chairman of the Chattogram Port Authority, wrote a letter about the adjusted pricing structure plan on September 18, 2021, to the Senior Secretary of the Ministry of Shipping. The letter recalled a meeting with the shipping adviser on 25 August, where industry stakeholders presented detailed objections to the proposals.
The new tariffs, as perceived by the BSAA, impose "unprecedented" financial and operational pressures on the shipping sector. Nearly 70% of the revised tariff schedule is deemed excessive by the association. The berth operator rates at Chattogram port have increased by 35%, while private off-dock charges have increased by 44% from 1 September.
The private off-dock charges are particularly on direct out-of-pocket expenses borne by shipping lines. Port congestion at Chattogram port is causing daily losses of US$15,000-20,000 per vessel from delays. Growing storage and equipment costs are a result of this congestion.
The tariff dispute at Chattogram port could strain ties with foreign principals and have knock-on effects across the supply chain. Higher expenses for importers and exporters due to the tariff dispute threaten business viability. Charges at Chattogram port, which stood at US$30-32 per unit in 1986, now exceed Tk120.
The BSAA has proposed phased implementation or constructive dialogue to ensure a more sustainable outcome at Chattogram port. Major adjustments to the charges at Chattogram port were made in 2007 and 2020. A 20% tax imposition has been imposed on imports at Chattogram port.
The Chattogram port handles over 90% of Bangladesh's trade, and the tariff dispute underlines growing pressures on the logistics sector amid broader economic challenges. The abrupt changes at Chattogram port risk contractual breaches and eroded customer trust. Freight rates are often fixed in advance under long-term contracts, leaving operators unable to pass on the new costs at Chattogram port.
The tariff dispute at Chattogram port could threaten the stability of the entire shipping industry in Bangladesh. The BSAA's concerns, despite deliberations aimed at fostering understanding, were disregarded in the final implementation of the tariff changes. The shipping ministry is now under pressure to address these concerns and find a solution that benefits all parties involved.
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