Keep rise in port transport costs tolerable

Although we have two seaports, in reality Chattogram port is used far more for transporting goods. After the formation of the interim government, its Chief Adviser Dr Muhammad Yunus spoke hopefully about this seaport. We were also beginning to see some light of hope. In the fiscal year 2024–25, Chattogram port set a new record in container handling. During this period, about 32 lakh 96 thousand TEUs of containers were transported through the port. In the entire 2023–24 fiscal year, 31 lakh 68 thousand 690 TEUs of containers had been handled.

In the fiscal year 2021–22, the port had set a record by handling 32 lakh 55 thousand TEUs of containers. According to Chattogram Port Authority, the new record was possible thanks to the overcoming of the post-5 August dollar crisis, the return to normal imports and an increase in exports. But a recent development seems set to create a new challenge for transporting goods through Chattogram port. According to reports published in the media yesterday, Wednesday (17 September), transport costs at the port have suddenly doubled. Such a sudden rise in costs will not only affect businesses, it will also have a major impact on ordinary consumers.

For an economy like Bangladesh, which is heavily reliant on production and exports, this is a matter of grave concern. For raw materials imported in containers for the export sector, extra charges will have to be paid to Chattogram Port Authority. For exporting the same goods, another round of charges will have to be paid to private container depots (ICDs). Together, these additional charges will amount to nearly 91 per cent more! With the rise in transport costs at the port, businesses will come under pressure to reduce production costs. Small and medium industries are already operating with limited capital, and these extra expenses will create an additional burden for them. As a result, businesses will be forced to raise product prices.

Naturally, this will have a negative effect on the overall economy. There is also fear that our competitive position in exports will be undermined, because if the prices of our goods rise in the international market, buyers will begin looking elsewhere. According to available information, on average, business costs at Chattogram port have increased by 41 per cent. The sharpest increase has been in container handling charges. Yet almost all of Bangladesh’s exports by sea are transported in containers.

Industrial raw materials and valuable machinery are also imported in containers. Users say this means the increased charges will have the biggest effect on container transport. Until now, the average charge for a 20-foot container was 11,849 taka. Now it will be 16,243 taka. In the new notification, the exchange rate has been fixed at 122 taka per dollar. The handling charge for loading or unloading each container from a ship was previously 5,294 taka. Now it has been raised to 8,296 taka. In addition, charges on all types of general goods will increase by an average of 14 poisha per kilo.

Although businessmen are frustrated by the sudden doubling of costs, the Secretary of Chattogram Port Authority, Omar Faruk, said that much of the rates charged until now had been set back in 1986. Even after the increase, he said, the rates are lower than in neighbouring countries. The Port Authority also stated that the depreciation of the taka against the dollar, higher interest rates, rising wages of workers, higher equipment costs and increased maintenance expenses had forced them to raise service charges. Even so, a sudden doubling of costs will certainly put huge pressure on businesses. In the long run, ensuring stable transport costs is essential for the country’s trade and economy.

The government, port authorities and business organisations must sit together to find a solution. Otherwise small enterprises will close down, inflation will rise, and the purchasing power of ordinary people will suffer. Raising product costs is not a solution; rather, it will slow down the wheels of the economy. Therefore, the sudden doubling of transport costs at the port is also alarming for the country’s economic stability. Coordinated and effective measures are urgently needed. Our expectation is that there should be clearer understanding between businesses and the government in adjusting port transport costs. If increases in transport charges at the port are kept within tolerance, then the negative impact can certainly be reduced.