Port tariff hike sparks ripple effects

Chittagong Port Authority (CPA) started enforcing a revised tariff schedule with a steep 41 percent increase in service charges since midnight yesterday, despite widespread opposition from exporters and importers.

The port tariff hike has already started to have ripple effects, with shipping lines beginning to adjust freight rates to offset the increase in operational costs.

Meanwhile, owners of container-carrying prime mover trailers stopped transporting containers to the port yesterday afternoon, protesting an acute increase in port entry fees as per the new tariff schedule.

Amir Humayun Mahmud Chowdhury, former president of the Chittagong Chamber of Commerce & Industry, said the country's import and export trade costs would increase manifold due to the port tariff hike.

The situation would be aggravated by a 60 percent charge hike by the inland container depots (ICDs) and additional freight charges imposed by the shipping lines, he said.

Since 12:01 am, all ships arriving with containers and cargo at the port have been charged at the new tariff rate for different services.

The revised tariff came into force in line with a CPA circular issued on September 30, said CPA Secretary Md Omar Faruk.

This is the first time in 40 years the CPA has made a major revision of charges, fees, rents, and tolls on a number of its services, including container and vessel handling.

The government issued a gazette notification in this regard on September 14, announcing the new tariff structure to take effect from the following day.

Following a meeting with port users on September 21, the shipping adviser deferred the decision for one month and assured further negotiations.

But without any further discussion with stakeholders, the port authority, in a circular on September 30, declared the new tariff rates effective from October 15, businesses alleged.

Opposing the decision, Chattogram-based business leaders and entrepreneurs demanded the immediate suspension of the new tariff, which they said would raise the cost of doing business manifold and ultimately increase product prices.

CPA officials claimed that, on average, the rates are 41 percent higher than the previous tariffs.

But businesses said the increase in several charges is much higher, which would erode their competitiveness.

The charges for loading and unloading of export and import containers — the most common operations — have soared by 56.68 percent to $68 for a 20-foot full container load (FCL), up from the previous rate of $43.40.

Several foreign and local shipping lines have already started taking steps to adjust the costs.

Local shipping company HR Lines increased freight rates by an additional $25 to $30 per twenty-foot equivalent unit (TEU) laden container, effective from yesterday.

HR Lines operates container ships from Chattogram port to Colombo and Singapore.

In a customer advisory issued on October 7, the line informed clients that it had adjusted freight rates following the port tariff hike.

France-based global container shipping company CMA CGM yesterday implemented terminal handling charges (THCs) to align with Chattogram port's tariff revision.

Maersk Line increased THCs to $165 from the previous rate of $120 per 20-foot container starting yesterday.

Meanwhile, as per the revised tariff schedule, the CPA increased all types of vehicle entry fees.

The entry fee for heavy vehicles like trucks, covered vans, and prime mover trailers has been raised to Tk 230 per vehicle from Tk 57.50 — a 300 percent increase.

Mohammad Hossain, general secretary of the Chattogram Prime Mover Owners Association, said it is a huge and sudden increase, and they are not going to pay such a high entry fee.

Around 6,000 to 8,000 such vehicles enter the port every day to transport goods and containers.

"We are providing services to the port. Our drivers stay inside the port for over 8 to 10 hours for loading cargo while there are no washroom or cafeteria facilities inside," Hossain said.

"Furthermore, the authority has put an extra burden on us by enhancing entry fees exorbitantly without any consultation," he said.

On condition of anonymity, a prime mover owner said they would have no alternative but to increase transport fares if the port authority does not cancel the decision.