Of late, container shortage has emerged as a major issue amidst the raging Coronavirus pandemic. This has posed serious challenges to businesses even as reports suggest that thousands of containers have been held up at the Bangladesh’s premier port, the Chittagong Port for long, which is responsible for handling around 90 per cent of the country’s imports and exports.
Speaking to the media, Director of K Line Shipping, Shahed Sarwer maintained that container fares have increased due to a shortage of containers as most of the containers and goods have been stuck at various ports due to the pandemic-induced closure of manufacturing units around the world.
So even though imports and exports have risen over the past few months, the containers are not being delivered accordingly, said the Director of K Line Shipping while citing example of Bangladesh’s readymade garment sector even as he said that apparel exports are increasing gradually of late but are faced with the new challenges as empty containers are not readily available for shipping.
It may be mentioned here that according to some reports, around 25,000 import containers are said to be stuck at various transhipment ports even as the delivery at the Chittagong Port has reportedly been reduced by about 30-40 per cent compared to normal times due to the ongoing lockdown.
There are uncertainties regarding the arrival and delivery of imported cargo containers at Chittagong Port due to the congestion at transhipment ports in Sri Lanka, Singapore and Malaysia even as it is hampering production work as supply of raw material is hit thereby causing financial loss to businesses.
It may be mentioned here that as there is no deep seaport in Bangladesh, large container ships cannot dock at the jetty of Chittagong Port, and therefore, container goods imported from different countries are first unloaded at the transhipment ports even as reports maintain that workers at the Port of Colombo paused their activities last November due to the COVID-19 pandemic, which has caused the congestion, said people in know of things.
Garment company Clifton Group Director MDM Mohiuddin Chowdhury said containers of almost every garment company were stuck at transhipment ports and most of the containers coming from Europe have been stuck in the transhipment ports.
Even if the Clifton Group imported three containers of raw materials from the United States recently, the containers were stuck for 50 days at the transhipment port of Colombo as there was a lack of feeder vessels due to an increase in import volume.
About 25,000 TEUs containers of imported industrial raw materials from many garment companies in the country have long been stuck at the transhipment ports while according to several shipping lines, most of the containers – around 20,000 TEUs – are stuck in Colombo.
Ajmir Hossain Chowdhury, Assistant General Manager at Mediterranean Shipping Company, said, “Around 9,000 TEUs containers in our shipping line are stuck at the Port of Colombo due to the congestion of ships there,” even as Syed Arif Hossain, the newly elected Chairman of the Bangladesh Shipping Agents Association, on his part underlined that containers stuck in the transhipment ports will hurt the country’s trade and commerce.
MDM Mohiuddin Chowdhury, who is also the Director of the Chittagong Chamber of Commerce & Industry, said that the crisis has been caused by COVID-19 and “We have to bear extra fare per container. Even after the arrival of the container at Chittagong Port, the delivery of the container is being delayed due to red tape on the part of the institutions concerned. In this situation, it has become difficult to continue production in factories.”
Muntasir Rubaiyat, the newly elected Director of the Bangladesh Shipping Agents Association, said that there were berthing delays at transhipment ports for 2-3 days and that the crisis is protracted and there has been a ship jam.
Meanwhile, to address the issue of the shortage of containers, concerned authorities (Chittagong Custom House) has already started disposing 298 containers filled with perishable goods that were left abandoned by importers even as the customs authorities have already started disposing of around 6,000 tonnes of perishable items, including onions, apple, orange, seeds, meat, bone meal and fish feed, which were imported between 2011 to 2020 while customs and port officials said the initiative would help reduce the global container shortage amid the ongoing coronavirus pandemic.
To deal with this crisis, there is no option but to end the auctioning of containers quickly, said Shahed Sarwer, who went on to add that a container can be rented out 10 times in a year and that a shipping agent loses at least US $ 20,000 when a container gets stuck at any port even as according to Chittagong Custom House and Chittagong Port data, importers failed to take delivery of consignments worth a total of Taka 11,286 crore between July 2016 and December 2020 even as those goods are taking up 7,737 containers as well as valuable space at the port.
Besides, delivery of these consignments would have earned the Government around Taka 5,500 crore in customs duty, the data showed even as reports suggested that the customs authority earned just Taka 265.61 core by auctioning off 10,160 lots and perishable goods from 760 containers worth Taka 220 crore as it failed to auction off those items in a timely manner while the port users said if the auctions were arranged in due time, such wastage could be averted and, in turn, the country would have saved foreign currency by avoiding imports of the same goods.
It may be mentioned here that as per the Customs Act 1969, unclaimed goods can be auctioned off if importers fail to take delivery within 30 days of the consignment’s arrival at the port even as reports suggest that importers abandon their consignments at the port due to fall in prices in the local market, failure to submit original documents in support of the shipment, failure to get clearance permit reports, and their refusal to pay fines for anomalies.
Meanwhile, Deputy Commissioner of Chittagong Custom, AKM Sultan Mahamud, told media that it takes a little more time to carry out disposal activities in accordance with the proper rules and in an environmentally friendly manner.
But over the last two years, the sale of these products through regular auctions as well as the destruction of damaged or prohibited products has gained momentum, said the Deputy Commissioner of Chittagong Custom while adding that around 59 tonnes of dangerous chemicals that were abandoned at the port were recently destroyed.
Now, we started disposing of prohibited and perishable goods, he added further even as Ahsanul Haque Chowdhury, President of the Bangladesh Shipping Agents Association, said one of the reasons these containers have been lying in the port for years is the lack of coordination among agencies concerned, including customs, city corporations, the Atomic Energy Commission and the Department of Environment while adding if the goods of any containers need to be destroyed or auctioned off, then these departments must get involved.
“This makes the procedure quite lengthy and so, it should be made simpler,” said Ahsanul, adding, “We sent various letters to the National Board of Revenue (NBR) and customs house to ease the auction process. We suggested the formation of a taskforce committee that involves all related departments to speed up the auction procedure but those recommendations are yet to be implemented.”
Unclaimed goods occupy 15 to 20 per cent of the port’s yard, leaving insufficient space for emergency loading and unloading operations and other regular activities, said Md Omar Faruq, Secretary of Chittagong in the meanwhile while adding that the customs and port authorities have taken several initiatives to reduce those containers as emptying activities have increased compared to the past.
So, going by the efforts being undertaken by the authorities concerned, it seems it’s just a matter of time before more containers are freed up and used for shipments so as to address the issue of container shortage effectively even as coordinated efforts by the departments/entities concerned is only expected to speed up things further in the days to come.