The shipping ministry has withdrawn the fixed freight rate for vessels on the Chattogram-Pangaon route in a bid to revive cargo transport via river, which has seen a drastic decline over the past year.

Imposed by the ministry in 2022, the fixed rate faced strong opposition from businesses, which cited high costs and irregular vessel movement as key deterrents.

The Chittagong Port Authority (CPA), in a recent circular, announced that freight charges will now be determined through agreements between vessel owners and mainline operators without government interference.

The fixed rate faced strong opposition from businesses, who cited high costs and irregular vessel movement as key deterrents

The authority has also introduced a fixed vessel schedule from January, requiring at least five vessels to sail on the route each month.

Previously, only one or two ships operated per month, leading to uncertainty among businesses.

Pangaon Inland Container Terminal (ICT), jointly developed by CPA and the Bangladesh Inland Water Transport Authority (BIWTA) for Tk 154 crore in 2013, was meant to ease cargo pressure on highways and rail.

It was expected to offer a cost-effective alternative for import and export container transport.

However, high freight charges and slow clearance times have left the terminal largely underutilised.

According to CPA data, container transport between Chattogram port and Pangaon dropped by 90 percent in 2024, handling only 2,911 TEUs (twenty-foot equivalent units) compared to 29,932 TEUs in 2023. Only 21 ships sailed on the route last year.

In the last two months, 459 TEUs were transported, with seven vessels operating, showing some signs of revival.

Businesses and stakeholders have long demanded the liberalisation of freight rates and a regular vessel schedule to ensure the full-scale operation of the ICT.

CPA Secretary Md Omar Faruk confirmed the changes, expressing hope that they would boost cargo transport on the route.

A senior CPA traffic department official added that vessel operators now have the flexibility to negotiate freight charges, which could make the route more attractive.

Sea Glory Shipping, which operates six vessels on the route, welcomed the decision but noted that success depends on ensuring sufficient cargo availability.

"Operating vessels isn't viable without a minimum load," said Sea Glory Manager Mainul Hossain.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem praised the move, saying Pangaon ICT is vital for Narayanganj's knitwear exporters, who contribute 40 percent of the country's $25 billion knitwear exports.

He emphasised that regular schedules and economic freight rates would encourage businesses to use the river route.