Businesses lose interest in Pangaon ICT for high costs

Businesses are losing interest in transporting containerised cargo to and from Chattogram port via Pangaon Inland Container Terminal (ICT) on the Buriganga river in the capital's Keraniganj thanks to its high inland water transport costs, lengthy customs clearance and other obstacles.

The terminal was constructed in 2013 jointly by the Chittagong Port Authority (CPA) and the Bangladesh Inland Water Transport Authority to take some cargo movement pressures off the Dhaka-Chattogram highway and railroad corridors.

The Tk 154 crore terminal also promised swift transport of import and export boxes at low costs.

But, in reality, high freight rates and lengthy clearance times have left most of Pangaon's capacity unused over the past 11 years, according to official data.

During the January-October period of this year, container transport between Chattogram port and the terminal plunged by 92 percent to a mere 2,150 TEUs (twenty-foot equivalent units) from 28,444 TEUs during the same period last year, according to the Chittagong Port Authority (CPA).

Following the capsizing of a Pangaon-bound vessel en route from Chattogram port near Bhasan Char in July of last year, container transport on this river route dropped drastically.

Only 16 vessels plied the route in the January-October period, compared to 142 during the same period last year.

Md Omar Faruk, secretary of the CPA, said most shipping lines or main line operators (MLOs) do not include Pangaon as a destination for cargo delivery in their inland routing network.

A senior official at a foreign shipping line said the MLOs are less interested in using Pangaon as a destination due to higher vessel freight and other tariffs.

In October 2022, the shipping ministry set a fixed vessel freight chart for the route.

According to the chart, vessel freight costs $324 to transport a 20-foot equivalent unit of container in both directions between Chattogram port and Pangaon ICT.

The MLO official said that when other charges and tariffs like loading charges, river dues, barge hooks, harbour crane charges and lift-on or lift-off charges at the port and ICT are included, the total transport cost for a 20-foot import container stands at $519.

For an export container, he said the cost is as high as $402.

According to the MLO official, transporting the same import container from Chittagong port to Kamalapur ICD in Dhaka by rail costs just $245, while it is $219 for an export container.  

According to Clearing and Forwarding (C&F) agents, a prime mover charges up to Tk 35,000 (around $292) for carrying a 20-foot container on the Dhaka-Chattogram highway from the port to industrial units in Dhaka, Narayanganj, Gazipur and Ashulia.

CPA Secretary Md Omar Faruk said they recently sent a letter to the shipping secretary to withdraw the fixed vessel freight chart imposed in 2022.

Nasir Uddin Chowdhury, chairman of the standing committee on port and shipping of the Bangladesh Garment Manufacturers and Exporters Association, said apart from higher transport costs, vessels do not ply on this route regularly.

He stressed the need for a fixed schedule for vessels.

However, running vessels regularly requires enough cargo boxes onto the departing ship, according to vessel operators. They said they cannot operate vessels regularly on the route due to a shortage of enough containers.

Captain Shah Alam of Karim Shipping Lines, which operates two vessels on the route upon receiving adequate containers, said each of their vessels can carry 180 containers. But those carry way less than their capacity, causing each trip to incur a loss.

Wishing anonymity, a clearing and forwarding (C&F) agent of Pangaon alleged that there were plenty of instances that it took more than 50 days to release a container last year since customs officials randomly sent cargo samples for laboratory tests.

Admitting such delays in the past, Showkat Ali Saadi, customs commissioner of Pangaon ICT who joined recently, said they are addressing the issue as cargo samples are not being sent for random laboratory tests.

With some policy revisions, he assured businesses of an improved situation soon.