Freight cost on Ctg-Pangaon river route goes up 47pc

The cost of transporting containers on the river route from Chittagong port to Pangaon Inland Container Terminal has gone up 47 percent, frustrating exporters and importers.

In a notice on October 26, the shipping ministry reset the tariff at $220, up from $150, to transport a 20-foot loaded container on the river route.

The tariff has been re-fixed at $110, up from $75, to transport a 20-foot empty container. For a 40-foot loaded container, the rate is $440, up from $300, while it is $220, up from $150 for a 40-foot empty container.

Chittagong Port Authority (CPA) and Bangladesh Inland Water Transport Authority built the inland terminal jointly at a cost of Tk 154 crore to transport export-import containers at low costs and less time and to ease the pressure of cargo movement on the Dhaka-Chittagong railway and highway corridors.

The shipping ministry gave licences to 32 private firms to purchase vessels for the route, but no firm has yet purchased any vessel.

CPA purchased three container vessels from China and started transporting containers on the route in December 2013. However, the comparatively higher feeder freight and other tariffs for the Pangaon terminal, a lack of logistical support in and around the terminal and a lack of vessels plying the route have been discouraging exporters, importers and shipping liners from using the route.

Only 2004 TEUs (twenty-foot equivalent units) of containers, both export and import, were transported by the three vessels to date, according to CPA.

Port users said the cost of transporting goods between Chittagong port and Pangaon terminal is much higher than transporting goods between the port and the inland container depot in Kamalapur by railway or to industrial units in Dhaka, Narayanganj, Gazipur and Ashulia through the highways.

Moving cargo from Kamalapur depot to the port by railway would cost only $78.88; and if the consignee directly transported a similar quantity of goods in a covered van, it would cost around $150, port users said.

Mohammad Hatem, first vice president of Bangladesh Knitwear Manufacturers and Exporters Association, said users have long been demanding a cut in the feeder tariff on the river route.

Factory owners in Narayanganj, Gazipur and Ashulia will have to bear additional costs to carry goods from Pangaon to their factories, in addition to the transport cost between Chittagong port and Pangaon, he added.

The new feeder tariff would discourage exporters and importers from using the route, said Hatem. To popularise the river route, the tariff should be kept at previous levels or reduced for at least a year, he said.

Mahbubul Alam, president of Chittagong Chamber of Commerce and Industry, said users may lose interest in using the route at the increased tariff. “The decision should be reconsidered.”