The nation’s ports have almost reached their total capacity allotment, causing ocean carriers to decrease port visits or impose surcharges for Chittagong imports, and spurring the government to allow the private sector to assist in reducing the congestion.
Chittagong port continues to struggle with congestion as the port authority and government officials give more autonomy to private operators.
Bangladesh has been battling rising volumes and shipping traffic, leading to additional congestion surcharges by feeder vessel operators and impacting the country’s import and export activities.
As a result, the seaport has announced that it will open up to global port operators and increase port capacity, according to Chittagong Port Authority (CPA) chairman Rear Admiral M Khaled Iqbal, as reported by Bangladesh’s Financial Express.
CPA plans to implement a new port arrangement, under a new landlord, by allowing international firms to design, build, finance, operate and maintain new port terminals. According to the report, Chittagong will withdraw from dock management and become a landlord. CPA’s hope is that “engaging globally established firms in the construction, operation and maintenance of new terminals will help reduce the port’s turnover period and increase handling capacity,” said Admiral Iqbal.
As the country’s largest most heavily congested port, Chittagong handles 92 percent of the country’s total import and exports, with cargo worth around US$77 billion annually, said Admiral Iqbal. CPA reports that Chittagong port saw up to 17 percent growth in cargo and container handling, while Bangladesh’s overall economic growth has exceeded six percent, over the past several years. The country’s total container traffic reached 2.4 million TEUs last year, however, total container handling capacity is 2.64 million TEUs annually, which is will be met and exceeded by 2019 if container volumes continue at their current pace, said CPA.
The high capacity rate has led ocean carriers to limit the number of voyages to the port or to impose surcharges on imports. French ocean liner CMA CGM and its Australian subsidiary ANL imposed Port Congestion Surcharge (PCS) of $150 per TEU last month. Danish giant Maersk Line has imposed Peak Season Surcharge (PSS) and Emergency Risk Surcharge (ERS) from Africa to Chittagong of $148 and $960, respectively.
According to the Financial Times, the government is ready to approve additional Inland Container Depots (ICDs) and Inland Container Terminals (ICTs) in the private sector to reduce the congestion at Chittagong. “ICDs facilitate quick clearance of FCL (full container load) cargo by allowing un-stuffing and delivery from outside the port area,” while “the private sector ICTs, mainly located close to Dhaka, help carry goods to seaports through waterways, reducing pressure on highways,” said the Financial Times.
“To help deal with the present congestion in Chittagong port, at least seven or eight more private ICDs are needed,” said CPA.