Congested, corrupted, poorly run and threatened by strikes \u2013 welcome to the port of Chittagong, a teeming mass of terminals and support facilities located on the estuary of the Karnaphuli River in Bangladesh.<\/p>\n
One international agency company based at the port \u2013 which asked not to be named \u2013 offered this damning verdict: \u201cThis has to be one of the most difficult places in the world to do business. It\u2019s chaos. There is corruption and there\u2019s no effective management structure. The delays are often random and impossible to plan around. Customs is at best inefficient, at worst malfunctioning and corrupt.\u201d<\/p>\n
Unfortunately for the nation\u2019s shippers, the port handles some 90% of Bangladesh\u2019s international trade. Figures from the World Bank\u2019s \u201cEase of Doing Business\u201d 2010 report support the harsh analysis. Out of the 183 countries surveyed, Bangladesh ranks 107th on \u201ctrading across borders\u201d, 119th for \u201cease of doing business\u201d, 176th for \u201cproperty registration\u201d and 180th for \u201cenforcing contracts\u201d. The steps involved to build a warehouse require, on average, 14 procedures and take 231 days.<\/p>\n
The container business illustrates some of the challenges faced by Bangladeshi importers and exporters using the port of Chittagong. Last year container throughput grew by 8.6% year-on-year to 1.16m teu as both imports and exports increased. But in May, Chittagong Port Authority (CPA) took control of handling at 12 jetties after three-year contracts with berth operators, which had helped improve efficiency, came to an end and were not renewed.<\/p>\n
Since the change in management, stevedoring unions backed by national politicians eager for votes have been more assertive \u2013 strikes have become a constant threat and average vessel turnaround times have increased by five to six days. Shippers also allege that the newly empowered port workers, led by the Chittagong Port Dock Workers and Employees Federation (CPDWEF), have demanded extra payments just to release cargo.<\/p>\n
The upshot has been shipping lines imposing a range of congestion surcharges for cargo using the port. Hong Kong-based carrier OOCL told Port Strategy that congestion had forced it to increase its surcharge on Asian cargo moved to Bangladesh and Dhaka by $50\/teu from the start of August, taking the total surcharge to $150\/300 per teu\/feu for Chittagong and $250\/500 per teu\/feu for Dhaka.<\/p>\n
Given that Bangladesh relies on its low labour costs to attract incoming investment in industries such as textiles which provide sizeable contributions to national export earnings, traders are understandably rather nonplussed that higher transaction costs at Chittagong are eroding their advantage in international markets.<\/p>\n
One local report suggested that external trade losses due to recent liner congestion surcharges were now costing the country some $5m each month.<\/p>\n
A tender process to attract terminal operators to operate the 12 jetties being managed by CPA was launched in July, but no deadline for the process has been set, adding to the uncertainty.<\/p>\n
CPA would not comment on the issue or on any of its plans to improve the port\u2019s efficiency and develop facilities, despite repeated attempts by PS. \u201cWe cannot answer any questions about the port,\u201d said one apologetic official.<\/p>\n
Port users confirm that they get a similar response from the CPA. \u201cIt\u2019s very difficult to get any information about even basic procedures from them,\u201d says the agent.<\/p>\n
Fortunately for the frustrated shippers, there are some efforts under way by private sector companies aimed at improving efficiency.<\/p>\n
AK Khan Group plans to build the country\u2019s largest inland container depot (ICD) and a project proposal is currently with the national shipping ministry. The facility\u2019s proposed design offers capacity for 175,000 teu per annum and would help reduce congestion on the Chittagong-Dhaka highway by transferring cargo on to barges plying the Shitalakhya River. Container yards, warehouses and trailer parking space are all planned, with construction expected to take six months. However, no time scale has been put on the project and a number of regulatory hurdles must still be cleared.<\/p>\n
Local reports also suggest that long-planned dredging of the Karnaphuli River, which is is heavily silted, could start in December. The CPA is understood to have pre-qualified a number of bidders but will not confirm a timetable for the project. A previous attempt by the CPA to complete the project in 2005 foundered on rising costs and delays in implementation.<\/p>\n
Bangladesh did, however, recently sign a $1bn loan deal with India to help implement 14 infrastructure projects. The deal also grants Indian shippers access to the port of Chittagong to facilitate transshipment of Indian goods to its northeastern region.<\/p>\n
The port of Chittagong could benefit from the new Indian credit line \u2013 but with financing will come expectation. The CPA could soon find itself on the end of criticism from its international neighbours as well as from its domestic customers.<\/p>\n","protected":false},"excerpt":{"rendered":"
The port of Chittagong needs an overhaul, reports Mike King.<\/p>\n","protected":false},"author":8,"featured_media":8047,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[58],"tags":[],"sponsor":[],"class_list":["post-8046","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-container-cargo-handling"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8046","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/comments?post=8046"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8046\/revisions"}],"predecessor-version":[{"id":8048,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8046\/revisions\/8048"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media\/8047"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media?parent=8046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/categories?post=8046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/tags?post=8046"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/sponsor?post=8046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}