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Importers, exporters deprived of benefit

Saleh Noman
18 Sep 2022 00:00:00 | Update: 18 Sep 2022 00:21:53
Importers, exporters deprived of benefit

The recent decrease in freight costs on international routes by more than half failed to benefit the country’s importers and exporters as freight processing charges have increased by almost 50 per cent at the same time.

At present, in the case of imports, the shipping cost per container has decreased by about 66 per cent compared to the last year, said sources concerned.

According to the Bangladesh Shipping Agents Association (BSAA) sources, the shipping cost from China, from where the majority of the imported goods come to Bangladesh, is now (mid-September) around $3,000 for a 40 TEUs (twenty-foot equivalent unit) container which was $9,000 in mid-2021.

Most of the imported goods come to Bangladesh via Europe and America routes, said sources, adding that at present, the shipping freight in those routes for a 40 TEUs container is $5,000-$7,000. A year ago, this rate was up to $18,000.

BSAA Senior Vice President Iqbal Ali Shimul said, “The crisis created by the Covid pandemic in the global shipping business is almost over now. The shipping costs that increased abnormally during the pandemic have started decreasing since April last. It seems that ship fares will come down to pre-pandemic level soon.”

“Keeping pace with the recent hike in fuel oil prices in Bangladesh, product handling and transportation charges as well as export and import processing fees of various other agencies have also increased,” he said.

As a result, he continued, importers and exporters have been deprived of the benefit the international freight decrease was supposed to bring.

The private Inland Container Depots (ICDs), an important part of the supply chain in Bangladesh, handle 100 per cent of pre-shipment process of exports and 23 per cent post-shipment process of imported goods.

According to sources, the ICDs increased their charges by 35 per cent in August last. Recently, freight forwarders have also increased their charges by as much as 55 per cent.

The country’s importers and exporters who are not getting the benefit of the reduced international shipping rates have strongly reacted against the hike in ICD and other processing charges.

“The ICDs increased the charges without taking any opinions from the stakeholders. Due to the increase in charges of ICDs and freight forwarders, the cost to complete the overall export process has increased by at least 50 per cent,” said Syed Nazrul Islam, senior vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

He said the increase in oil prices has nothing to do with the freight forwarders, yet they have increased the charges. Besides, the ICD owners cannot increase the charge themselves.

But Iqbal Ali Shimul, also the owner of a large ICD, said with the increase in fuel prices, many of our expenses have also increased a lot, but the exporters are indifferent to this fact.

“When the entire world was returning to normalcy recovering from the shock of the Covid pandemic, the entire supply chain was destabilised by the sudden and abnormal increase in fuel oil prices in the country,” he added.