Private ICDs to hike tariffs from August 1

Private inland container depots (ICDs) are set to increase their charges for handling consignments by 20-25 percent from tomorrow, in a development that will raise the cost for importers and exporters by more than Tk 100 crore annually.

Almost 90 percent of the total export goods are stuffed into containers at the 19 private ICDs, also known as off-docks, located in and around the port city, before shipment through the Chattogram port, while 21 percent of the import containers are sent from the port to the ICDs, from where the import goods are delivered.

Besides, the import containers that become empty after the goods are delivered directly from the port are also sent to the ICDs for storing for a particular time.

The 19 ICDs handled around 6.15 lakh TEUs (twenty -foot equivalent units) of export containers, 2.86 lakh TEUs import containers and 5.87 lakh TEUs empty containers in 2018-2019 fiscal year.

Earlier on February 28, Bangladesh Inland Container Depots Association (BICDA) issued a notice to inform a hike in charges by 20 to 25 percent on average due to rise in operational and investment cost, devaluation of the local currency against the US dollar, increase in fuel prices, labour charges and equipment maintenance cost.   

The last time the ICDs had raised the charges was back in April 2016. According to the notice, a committee of Chattorgram Port Authority (CPA) in a report in April 2016 said the ICD’s operational and other related costs had increased by 42 percent between 2010 and 2015.

The report said the ICDs should have increased the charges by 42 percent then. BICDA President Nurul Qayyum Khan said upon insistence from the stakeholders and request by the CPA at that time they had agreed to increase charges by only 20 percent.

The then CPA chairman had also strongly assured that the ICD charges would be increased by the remaining 20 percentage points a year later.

“Almost two years have elapsed since the deadline for the assured review,” Khan said.

Since the operational expenses had increased 42 percent but rates were reviewed upwards by only 20 percent, the ICDs are struggling to cover the huge gap to maintain their operational efficiency.

Since April, three committees have so far been formed by the shipping ministry and CPA but nothing could be done.

Due to the increase in service charges, users including exporters and importers will have to bear additional trade costs amounting to more than Tk 100 crore annually.

Garment exporters are the major users of these ICDs.

Nasir Uddin Chowdhury, president of the Bangladesh Garment Manufacturers and Exporters Association’s standing committee on port and shipping, said the BICDA is defying the ICD policy.

The ICD policy states that for hike in charges the ICDs need to apply to the shipping ministry first, which would then form a tariff committee to vet the hike.

The committee’s recommendation would then need to be approved by the ministry before the hike becomes effective.

Regarding the defiance of the ICD policy, Khan said such a clause in the policy is detrimental for the sector.

A ministerial committee should not fix tariffs of a competitive private service sector, he said, adding that charges taken by other service sectors like transport or clearing and forwarding are not fixed by such a committee.

Bangladesh Freight Forwarders Association (BAFFA) Director Khairul Alam Sujan said the exporters, importers, foreign buyers and freight forwarders would have to bear additional cost if such a tariff hike is implemented.

The shipping ministry has formed a 13-member tariff committee led by CPA member (harbour) while another sub-committee is doing feasibility study on reviewing the tariffs and would submit their report soon.

“BICDA cannot increase the tariffs on its own at this stage,” he added.