Bangladesh has 19 off-docks or inland container depots (ICDs) with a cumulative capacity to store around 10,000 TEUs of export containers.
However, the exporters, especially those into manufacturing and export of apparels, have reportedly fallen foul of the ICDs of late even if the equation between the two sides started to go downhill for quite some time now.
If one may remember, it was not too long ago when Chittagong Port was saddled with container congestion. The crisis coinciding with rebound of apparel exports after a prolonged lull on account of the pandemic has the garment exporters at wits’ end with each one scampering to ensure consignments reach the buyers before the holiday season kicks in the West, even if it meant taking the expensive route of airlifting the shipments.
Handling almost cent per cent of export goods, the ICDs in Bangladesh were clogged with export containers then due to shortage of vessels and congestion at transhipment ports (such as Singapore, Colombo and Port Klang), causing the export activities to hit a snag even if it led to freight charges going through the roof.
According to the Bangladesh Inland Container Depots Association (BICDA), while it usually took 2-3 days to send a container from the ICDs to the Chittagong Port for loading to the vessels, it was then taking around 7-10 days, leading to long tailbacks of exports-laden vehicles in front of the ICDs.
The crisis has been there for the last couple of months and is getting severe day by day, underlined the BICDA while its President Nurul Qayyum Khan wrote to the President of Bangladesh Freight Forwarders Association (BFFA) adding ‘forwarders were also giving cargo loading plan (CLP) late, which led to goods lying at the container freight stations (CFS) for a longer period than usual, causing the CFS to stretch beyond capacity.’
“Our 27 export-laden covered vans are waiting for 3-4 days in front of ICDs for unloading at CFSs but they cannot get unloaded due to inadequate space in the ICDs. We have to count a demurrage for prolonged stay of trucks and covered vans in front of the ICDs,” complained Managing Director of Pacific Jeans Ltd., Syed Mohammad Tanvir, also a Vice-President of the Chittagong Chamber of Commerce and Industry (CCCI), adding, “The delay is also delaying our payment because of late submission of documents. This is creating a cash flow crisis, slowing down our overall export growth.”
The import cost angle…
Export hassles apart, the garment makers expressed their displeasure pertaining to the so- called increase in cost of importing of raw materials so much so that the BGMEA sought deliveries of all import-laden containers at the Chittagong Port itself instead of the private off-docks as they claimed off-dock release costs them 65 per cent more per container while the time consumed in the process is almost the double.
The BGMEA in a letter in this direction claimed releasing a 20-foot container from the port costs Taka 4,277 while it costs Taka 13,755 to release the same from inland container depot, while for a forty-foot-long container, apparel-makers say the ICD release cost them Taka12,104 more than that of releasing and taking delivery at the port.
“We hear that releasing imports from the ICDs is going to be permanent…, we are voicing our concerns for the customs (to address),” said BGMEA First Vice-President Syed Nazrul Islam underlining it belied logic to forward the containers to the ICDs from the port more so when the congestion at the port has eased out already.
Tussle turns for worse…
Things reached an impasse after the exporters demanded alternative options to break what they feel is ‘cartel’ of the owners of inland container depots (ICDs) as the latter reportedly raised charges ‘unilaterally’ making exports costlier while they also sought incorporating a provision for the setting up of export-CFS (container freight station) into the draft private ICD policy.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a letter written to the country’s National Board of Revenue (NBR) requested allowing forwarders, warehouse owners and any business group to set up CFS to facilitate outbound trade.
The BGMEA President placed the demand amid the ongoing row between users and owners of the country’s 19 ICDs over the hike made on grounds of fuel price increase through a much-contended Government decision.
Faruque Hassan, in the letter, said ICD owners increased charges by 23 per cent following oil-price hike though there is no involvement of fuel oils in cargo stuffing.
“They are charging unlawfully…,” alleged the BGMEA President even as he underlined CFSs owned by forwarders or warehouse companies are needed to process the export cargoes while ICDs are established to handle export-import and many other multifarious activities.
Elaborating on the functions of ICDs, the BGMEA chair said ICD is a dry-port where CFS and off-docks are its parts; adding goods are stuffed and un-stuffed in the containers inside the CFSs while ICD does many other jobs. On the other hand, he wrote, off-docks are container yards where boxes are stored after bringing them from ports and elsewhere.
The BGMEA President pointed out export CFS is a small establishment of any size where a shed with a few parking spaces, a crane and weighbridge are needed and only the empty containers go there for stuffing goods before being sent to the ports even as he argued that in almost all countries, export cargoes were stuffed in the CFSs owned by multimodal transport operators while in many countries, forwarders and warehousing companies have CFSs according to their requirement.
Citing an example, the BGMEA letter, said in case of India, there are over 2,000 CFSs to facilitate exports.
“…Bangladesh’s US $ 28 billion worth of apparel export is dependent on 19 ICDs where trucks sometimes wait for 3 days to load or unload cargoes. The exporters themselves pay demurrage to trucks for the overstay,” said Faruque Hassan adding the existing ICDs lack adequate equipment and are located very close to the port area even if the authorities concerned have now mandated new ICDs can only be set 20 kilometres away from the port, and need to have 15 acres of land, and a large number of equipment.
Since there is hardly any possibility of setting up new ICDs and exporters have no other options but to depend on the existing ICDs, the owners have created a cartel and charging at their will, underlined the BGMEA letter.
Difference between Inland container depot (ICD) and Container Freight Station (CFS)
ICD is a customs station like a port or air cargo unit for the purpose of unloading of imported goods and loading of export goods or any class of such goods.
|CFS is only a custom area located in the jurisdiction of a Commissioner of Customs exercising control over a specified custom port, airport, and land customs station/ICD. It is an extension of a customs station set up with the main objective of decongesting the port.|
|ICD can have an independent existence as it is a ‘self contained customs station’||CFS by itself cannot have an independent existence; it has to be linked to a customs station within the jurisdiction of the commissioner of Customs|
|Customs manifests, bills of entry, shipping bills and other declarations are filled in an ICD. Further , assessment and all the activities related to clearance of goods for home use ,warehousing ,temporary admission ,re-export ,temporary storage for onward transit and outright export ,transhipment ,etc. take place in an ICD||In CFS, only a part of the customs process – mainly the examination of goods – is normally carried out and goods are stuffed into containers and de-stuffed there from. Aggregation/segregation of cargo also takes place at CFS.|