Freight cost to reduce by a third

With the launch of a direct shipping route from the Chattogram port to the port of Ravenna in Italy, the cost of transporting goods to Europe will go down by at least a third.

Since the outbreak of Covid-19, shipping costs have increased eight to 10 times worldwide. The cost to transport a 40 twenty-foot equivalent unit (TEU) container to Europe was $2,000, which jumped to $20,000-22,000 at one stage during the ongoing global health crisis.

It currently costs $14,000-15,000 to transport such a container, but the amount will come down to $8,000-10,000 on the direct route from Chattogram to Italy, shipping operators said.

For the first time, a ship carrying readymade garments will start its journey from Chattogram to Ravenna on January 28 next year.

On December 23, MV Cap Florence sailing on the route with 975 TEU of empty containers arrived directly at the Chattogram port from Europe.

In the last week of next month, another ship will arrive at the port with empty containers and will return with 975 TEU of export containers.

Until now, containers have been transported on this route via Singapore, Malaysia’s Port Kelang, or the Port of Colombo. They are sent to these ports by feeder ships. The goods are then loaded onto mother vessels and transported to various destinations, including Europe.

With the help of Italian buyers, Kalypso Compagnia di Navigazione, ‍a ship operator at the Chattogram port and an affiliate of freight forwarder RifLine Worldwide Logistics, has taken initiatives to operate direct ships from Chattogram to Ravenna and Civitavecchia ports.

Tanvir Ahamed, regional head of RifLine Worldwide Logistics, said, “Shipping costs will drop by 30-35 per cent by transporting containers directly to Europe.”

He said shipment time would also reduce by at least a week. “It takes 20 days to ship goods directly from Chattogram to Ravenna. But it takes about a month to transport goods from Chattogram to any port of Europe via Singapore or Colombo.”

Due to increased costs and inconvenience in worldwide shipping during the pandemic, major readymade garment buyers in Italy have jointly taken initiatives to start direct shipping between Chattogram and Europe. As part of that, the Chattogram-Italy route has been launched.

The route is initially being launched with two container vessels, with a capacity of 1,200 TEU. The vessels will operate regularly on the route and will be able to berth directly at the Chattogram port jetty.

As a result, billions of dollars will be saved in the European market and the garment sector as well. Apparel is Bangladesh’s top export item.

Mohammad Rashed, chairman of Reliance Shipping and Logistics, the local agent of MV Cap Florence, said the door to utilise huge potential was going to open with the launching of the direct route to Europe.

“Besides, cost and time of exporting goods to Europe will decrease without the help of mother vessels at transshipment ports. This will revolutionise the export of garments made in Bangladesh,” he added.

Sources said the products of several world-renowned clothing brands, such as Kappa, Teddy, and OBS, would be transported directly on the Chattogram-Ravenna route.

Syed Nazrul Islam, first vice-president of Bangladesh Garment Manufacturers and Exporters Association, said, “With the reduction in costs and time to send goods to Europe, we will be far ahead of our competitors in the garment sector.”

He said buyers want to receive products fast and 60 per cent of Bangladesh’s apparel exports go to European countries.

“The garment sector will get a lot of benefits if the initiative of direct shipping is successful,” he added.