More inland container depots essential

The BM Container Depot fire, on the night of June 4, led to a serious slowdown in cargo movement. All cargo that was earlier planned for processing at the BM Depot was diverted to other depots at Chattogram prior to its onward journey. Consequently, the logistics ecosystem at Chattogram experienced severe operational challenges due to transit capacity constraints at various depots and resulted in increased cargo waiting times. Due to the sudden change in cargo re-routings, the depots have been experiencing an array of challenges on ground, leading to delays in container placement, laden movement to port, etc. The increased amount of cargo, ahead of Eid ul Adha has worsened the situation.

According to a report published in The Business Post on Thursday there is stagnation in activities at all 18 Inland Container Depots (ICDs) – which handle 100 per cent of exports and 23 per cent of imports to and from the Chattogram Port– in and around Chattogram city. And this unwelcome phenomenon has left cargo vehicles waiting outside for at least three-four days. The report, citing industry insiders, stated that the cost of transporting all types of export goods, especially garments, from Dhaka to Chattogram has risen threefold and for imported goods twofold from the port city to Dhaka. Thousands of trucks, covered vans and prime movers are currently waiting for days in front of all the ICDs.

Chowdhury Zafar Ahmmed secretary general of Bangladesh Covered Van truck Prime Mover Goods Transport Association told The Business Post “This is an unprecedented crisis. We haven’t seen anything like this in recent times. Due to this, recently transport booking has risen significantly. That, coupled with the insane waiting time, has pushed up the fares several-fold recently.”

What has added to the bleak picture is the fact that the warehouses are running low on space and failing to release the vehicles at the soonest. The report stated that there are several kilometres-long queues of cargo vehicles in front of all ICDs that have been waiting for several days. Most of them are loaded with export-oriented garments while the rest are waiting to‍ enter the ICDs and bring out imported goods.

The excessive cargo pressure has led to cargo vehicle owners and drivers to demand increased fares. Sources say that the vehicle owners are demanding double or triple the usual fare.

Stakeholders believe that it is necessary to resume BM Depot operation considering foreign trade of the country and supply of raw materials/imported cargo of industries and consumable goods upon compliance of all legal steps– export of intact containers with export cargo and delivery of raw materials/imported cargo and consumable items of import containers to the importers, use of empty containers for import/export trade and delivery of raw materials/imported cargo of industries and consumable goods to the importers and use of empty containers for import/export trade.

The current situation comes as a double whammy for Bangladeshi traders. Exports from Bangladesh have already been facing delays for the last couple of months owing to the global container crisis. 

According to media reports the inland container depots (ICDs) in Bangladesh are failing to transfer the products to the ports due to the acute shortage of containers. This problem has been amplified by delays in getting space on mother vessels in the transshipment ports.

On a more positive note the report alluding to Chattogram Port Authority Secretary Mohammad Omar Faruk stated that the excessive cargo pressure on ICDs will gradually decrease since port operations are remaining dynamic. The ministry concerned and the port authorities must try to mitigate the crisis.

We believe that what is essential is a long-term solution to the problem. The container volume is likely to increase in the coming days. The inadequate number of inland container depots (ICDs) will prevent Chattogram Port from handling increased container volumes. There is an urgent need for more containers. The government has to provide incentives to attract entrepreneurs to set up ICDs. The government can offer a tax holiday, reduce corporate tax, and declare it as a thrust sector to attract investors.