Owners of the 19 private inland container depots increased their tariffs yesterday amid strong opposition from businesses and in violation of the ICD Policy 2016.
According to the policy, the Bangladesh Inland Container Depots Association (BICDA) needs to first apply to the ministry for a tariff review, while only a tariff committee can propose revised tariffs. Those, in turn, need to be approved by the ministry.
The BICDA, however, say the last increase in tariff around three years ago was not enough and the latest committee has done next to nothing to revise the rates since.
Also yesterday, the shipping ministry held a meeting with all the businesses on the decision of tariffs, but failed to reach a consensus.
Following the meeting, the Bangladesh Garment Manufacturers and Exporters Association yesterday evening directed the clearing and forwarding agents not to pay the new charges, creating uncertainty over timely shipment of many export cargoes.
BGMEA First Vice President MA Salam said the hike would increase export costs and have a negative impact on the country’s readymade garments industries. He added that they would not pay any additional charge until the tariff committee formed by the shipping ministry makes a decision.
Chattogram Customs Clearing and Forwarding Agents Association General Secretary Altaf Hossain told The Daily Star yesterday that the association’s members had already been directed not to pay any additional charges to ICDs against export containers.
Due to the latest increase in the 12 types of service charges for landing, stuffing, labour, documentation and lifting, among others, the cost of total exports and imports would rise by around Tk 150 crore annually, industry insiders say.
According to the revised charges, for a 20 feet export container package (stuffing), costs increased by 25 percent from Tk 3,600 to Tk 4,500; per tonne landing charges rose by 25 percent from Tk 180 to Tk 225 and per carton labour charges increased by 50 percent from Tk 3 to Tk 4.50.
For a 20-feet export container the ICDs’ service charges have now gone up by Tk 2,000 on average.
Almost 90 percent of export goods are stuffed into containers at the 19 private ICDs, also known as off-docks, located in and around the port city, before shipment through the Chattogram port.
Another 21 percent of the import containers are sent from the port to the ICDs, from where the goods are delivered.
BICDA on February 28 issued a circular increasing 12 types of tariffs by 20 to 25 percent on average.
Owners say the increased costs are a result of devaluation of local currency against the US dollar and a rise in overheads such as fuel, labour and equipment maintenance.
ENDLESS COMMITTEES, UNWAVERING DEADLOCKS
In its February 28 circular, the BICDA said a committee of the Chattogram Port Authority (CPA) in a 2016 report said that the ICDs’ operational and other related costs had increased by 42 percent between 2011 and 2015, and so the charges should have been raised accordingly.
BICDA President Nurul Qayyum Khan said upon insistence from the stakeholders and requests by the CPA, they had agreed to an increase of 20 percent only.
“The then CPA chairman had also assured us that the charges would be increased by another 20 percent after a year,” he said, adding that almost two years had passed since the deadline for the second review of the tariffs.
The disparity in the increase in operational costs and the rates being charged by the depots resulted in the ICDs struggling to maintain operational efficiency, he said, adding that they were forced to revise the tariffs to save the sector.
The depots had earlier announced the new charges would be effective from April 1, but postponed the decision following requests from the shipping ministry and the CPA. Insiders claim the request for postponement came from exporters, importers and freight forwarders, among others.
The shipping ministry on April 1 this year formed an 11-member tariff committee headed by Shipping Ministry Joint Secretary Abdus Sattar Sheikh and held a meeting on the same day.
The BICDA president said it was the first meeting which came three years after the ICD Policy was formulated in June 2016.
The tariff committee held three meetings and formed another 13-member committee. The new committee, headed by Chattogram Port Authority (CPA) Member (Harbour and Marine) Captain M Shafiul Bari, then formed a sub-committee headed by CPA Assistant Terminal Manager (ATM) Ashraful Islam to work on the same issue.
“In several meetings of these committees, our voice was suppressed since we are the only service provider member, whereas the majority members are service takers,” said Khan, adding that the issue of fixing ICD tariffs was delayed as the service takers always opposed any raise in the charges.
On July 25, BICDA President Nurul Qayyum Khan in a letter sent to the shipping ministry secretary stated that they waited for the ministry’s steps in reviewing the charges, but the lack of progress led to the depots realise the newly revised tariffs.
Khan said since April, nothing had come of the committees formed by the shipping ministry and CPA to review tariffs.
Quoting the shipping ministry secretary, Bangladesh Freight Forwarders Association (BAFFA) Director Kabir Ahmed, who was present at the yesterday’s meeting, said the committee would submit its report soon.
In yesterday’s meeting, the issue of the ICD policy was also brought up and it was argued that ICDs cannot alone revise its charges.
Bangladesh Freight Forwarders Association (BAFFA) Director Kabir Ahmed said the ministry secretary who chaired the meeting urged BICDA not to enhance the tariffs since a committee was working to fix those.
He said BICDA could increase tariffs but should wait for the committee’s report.
The 19 ICDs handled around 6.15 lakh TEUs (twenty-foot equivalent units) of export containers, 2.86 lakh TEUs import containers and 5.87 lakh TEUs empty containers in 2018-2019 fiscal year.