‘Unacceptable': BGMEA Blasts Bangladesh Container Handling Fee Hike

Yahoo

6 days ago

Exporting apparel and other goods out of Bangladesh is about to get more expensive.
Earlier this month, the Bangladesh Inland Container Depots Association (BICDA) unveiled it would raise export and empty container handling charges at private inland container depots (ICDs) in Chattogram.
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The rate increases are effective Sept. 1.
Currently, 19 ICDs are in operation for both imports and exports, while two additional ICDs are managing empty containers. These yards host excess containers that are transported to and from Bangladesh's largest seaport, Chattogram. In total, the depots manage approximately 93 percent of total export goods and 20 percent of import goods.
Under the new rates, most export handling charges will increase 60 percent. A 20-foot container will increase from 6,187 Bangladeshi taka ($51) to 9,900 taka ($81), while a 40-foot container's charge will jump from 8,250 taka ($68) to 13,200 taka ($108).
BICDA also introduced a separate handling charge of 14,900 taka ($122) for 40-foot high-cube or 45-foot containers, which previously shared the same 8,250-taka ($68) rate as 40-foot containers. This marks an 81 percent spike—the largest of all the new charges.
The decision comes as the Bangladesh apparel industry is already under duress as it faces a possible 35 percent tariff on exports to the U.S. starting Aug. 1. Readymade garments (RMGs) represent 81.5 percent of the country's exports, totaling $39.3 billion dollars in the 2024-25 fiscal year ending June 30, according to the country's Export Promotion Bureau.
On top of the tariffs, Chattogram Port, also known as Chittagong Port, has endured significant congestion in recent weeks as customs workers went on a two-day strike at the end of June and a software slowdown created processing delays.
Members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have shown their displeasure with the increased charges.
BGMEA senior vice president Inamul Haq Khan told Indian business publication The Financial Express that depot owners were unexpectedly raising charges without discussing that with the main users of their facilities.
'They should have discussed with us whether we can absorb the higher charges or not,' Khan said, referring to the situation as 'bad timing' when the country remains engaged with the U.S. in tariff negotiations.
BGMEA board director S.M. Abu Tayyab told Bangladeshi publication The Daily Sun that BICDA does not have authority to impose such a charge, noting that ICDs function as extensions of the port.
'They must consult with the port, which is responsible for addressing such issues. Increasing tariffs by 60 to 70 percent is simply unacceptable,' said Tayyab. 'This will erode our competitiveness in the global market, as buyers will be forced to bear higher logistics costs.'
Chattogram Port Authority secretary Mohammad Omar Faruk disagreed with Tayyab's assertion that BICDA could not raise the charges, and noted that there is no regulation that mandates the port's involvement in setting the depots' rates.
BICDA secretary general Ruhul Amin Sikder defended the decision in the circular sent out July 15, noting that costs to operate the depots continued to increase, making capacity expansion 'very difficult.'
'The new ICDs are also struggling to attain financial viability and achieve full operational capability,' said Sikder.
According to Sikder, costs have escalated across labor, as well as equipment purchasing and maintenance. Additionally, the depots must maneuver through wider concerns across the country, including inflationary pressures, increasing bank interest rates and the devaluation of the taka against the U.S. dollar.
The circular also noted that while port and freight charges are often paid in U.S. dollars, ICD charges are still collected in local currency, making it difficult for depot operators to cope with mounting costs.
Sikder also said that the charges had remained largely unchanged for over a decade, despite transport costs on the Dhaka-Chattogram highway increasing by more than 20,000 taka ($164) in recent years.
Under BICDA's rate hikes, the transportation fee for empty containers has gone up nearly 47 percent from 1,705 taka ($14) to 2,500 taka ($20.50) for 20-foot containers. Forty-foot high-cube containers will see the fee increase 17 percent from 3,410 taka ($28) to 4,000 taka ($33).
Additional fees such as landing charges will also see an upward revision, rising from 207 taka ($1.70) per metric ton to 270 taka ($2.20). Similarly, the off-dock container freight station storage fee will increase from 29 taka (24 cents) to 45 taka (37 cents).
Ground rent for 20-foot containers has been raised from 115 taka (94 cents) to 150 taka ($1.23), and for 40-foot containers from 230 taka ($1.89) to 300 taka ($2.46)—both increases of more than 30 percent.