Chittagong shippers hit out at depot charge hikes as demand falls

Chittagong shippers hit out at depot charge hikes as demand falls

© Matyas Rehak Dreamstime.com By Bangladesh
correspondent  

25/08/2022 The Loadstar

After the Bangladesh government raised fuel oil prices by 42.5% this month,
inland container depots in Chittagong have decided to raise diesel-linked
service charges by 25% to meet the increased costs, as shippers claim demand is
falling.

The Bangladesh Inland Container Depot Association (BICDA) held two meetings
with the Bangladesh Freight Forwarders Association and Bangladesh Shipping
Agents Association and took the decision to raise charges after “finding no
other options”.

The government raised petrol prices by 51.1% on 6 August, with higher octane
prices rising by 51.7% and diesel and kerosene prices by 42.5%, in an effort to
lower its costs after it had been selling fuel at subsidised rates.

According to Nurul Qayyum Khan, president of BICDA, the tariff for an export
container handling package – including haulage, lift on/lift off charges and
weighing verified gross mass – will also be increased, by 25%.

“We are only raising charges of services that are dependent on diesel use,”
said Mr Khan.

The export goods stuffing package rate will be increased to $70, from $55,
for a 20ft container, while a 40ft box will incur a new rate of $90, from
$72. The BICDA has assured depot users it will lower the charges
accordingly once the government reduces fuel oil prices.

There are 19 private inland container depots in Chittagong, with a combined
daily handling capacity of 76,000 teu, and they handle almost 100% of outbound
containers and 38 types of goods laden import containers. Most of the
exports are taken to the ICDs where they are stuffed into containers before
being sent to the port.

BICDA secretary General Ruhul Amin Sikder said the association had fixed the
new rates as an upper limit and individual depots were free to negotiate rates
with their clients, but should not cross the ceiling.

Garment factory owners, the main ICD users, and port facilities, however,
find the new rates harsh at a time when work orders are declining, thanks to
the war between Russia and Ukraine impacting demand.

“We are getting fewer work orders. The depot service rate hike will have an
effect as it is buyers who ultimately pay the charges,” said Shahidullah Azim,
vice president of the Bangladesh Garment Manufacturers and Exporters
Association.

He also opposed the depot rate hike without consultation with a government
set tariff committee formed by the ministry of shipping.