Govt withdraws fixed freight rates for Pangaon ICT route

The government has withdrawn fixed freight rates on the Chittagong-Pangaon- Chittagong route, aiming to enhance container transportation by waterways and avoid carrying cargoes through congested highways and railways.

The Chittagong Port Authority (CPA) issued a notification in this regard last week.

According to officials concerned, the Ministry of Shipping on October 16, 2022 issued a circular fixing the rates for vessels operating on the route.

However, the importers and exporters found it "very high" and felt discouraged to use the Inland Container Terminal (ICT) at Pangaon in Dhaka.

In various meetings, the stakeholders have urged the authorities to liberalise the freight rates on the route to facilitate the ICT's full-scale operation.

In response to this demand, the government now has revoked the freight rate circular.

"We firmly believe this decision will enhance container transportation via vessels on this route," the CPA said in the circular.

"Consequently, freight rates on this route will now be determined based on bilateral agreements and relationships between vessel owners and mainline operators, with no further government intervention," it added.

The CPA also informed the stakeholders that a fixed schedule for vessels plying between Chittagong and Pangaon route has been announced for carrying their cargoes.

In the circular, it said the Bangladesh Railway has been failing to provide the required numbers of locomotives for sometimes to carry boxes to and from Chittagong and Kamalapur Inland Container Depot (ICD) due to various constraints.

As a result, the number of containers designated for the Dhaka ICD at the Chittagong port has increased to nearly 1,700 twenty-foot equivalent units (TEUs), exceeding the storage capacity.

It has led to significant delays for Dhaka-based importers in receiving their imported goods by train.

To mitigate this problem, the National Board of Revenue (NBR) issued a circular on February 19, allowing containers designated for the Dhaka ICD to be transported to Pangaon for clearance under certain conditions for next two years.

Importers whose containers have been awaiting rail transport to Dhaka ICD for an extended period now can carry their boxes through Pangaon to avoid further delay.

"This alternative will save both time and costs for importers," said the CPA circular.

Syed Mohammad Arif, Chairman of Bangladesh Shipping Agents' Association (BSAA), told the FE Sunday that from now on, the vessel operators in the Chittagong-Pangaon-Chittagong route and the mainline vessel operators will be able to fix freight rates through one-to-one negotiations.

"There will be a positive impact due to the new decision. Competition will be there as they will be able to fix rates bilaterally," he said.

Mr Arif said the previous rate was "very high" and was "not feasible" in any way to carry boxes in this route.

"Now the ship owners will offer a cheaper rate to those who carry big volumes of cargoes while there will be a separate rate for low volumes of cargoes," he said.

In fiscal year 2022-23, the Pangaon ICT handled 18,092 TEUs of import containers and 17,697 TEUs of export containers. The volume fell to 4,690 TEUs of import containers and 5,550 TEUs of export containers in the fiscal year 2023-24.

syful-islam@outlook.com