A shocking revelation has emerged from Chattogram Port, where the reality of a tariff hike is far more severe than initially claimed. The official narrative from the Chattogram Port Authority (CPA) paints a picture of a modest 41% increase, but the truth, as revealed by internal records and shipping calculations, tells a different story.
The impact of this hike is felt across the supply chain, from vessel operators to exporters, importers, and ultimately, consumers. Let's delve into the details and uncover the true extent of this controversial tariff increase.
The Numbers Don't Lie
When the CPA unveiled the new tariff structure, they downplayed the potential impact, stating it would only add Tk 0.12 per kilogram of cargo. However, the actual figures paint a grim picture.
For instance, handling a full container load (FCL) has seen a 63% increase, while less-than-container-load (LCL) shipments, typically used by smaller businesses, have skyrocketed by 105%. These increases have a ripple effect, disproportionately affecting smaller operators and leading to higher prices for goods across the board.
A Case Study: LCL Costs Double
Consider the case of Nipa Fashion Wear Industry Ltd, an RMG factory. In September, they imported four tonnes of raw material in a 20-foot LCL container. The bill reflected charges of Tk66.88 for wharf rent, Tk136.40 for river dues, and Tk1,200 for unstuffing, totaling Tk1,667.23, or Tk416.81 per tonne.
In October, after the new tariff, the same importer brought in five tonnes of similar goods. The bill now showed river dues of Tk271.78 and unstuffing charges of Tk3,325.17, with the total reaching Tk4,280.37. This pushed the per-tonne handling cost to Tk856.07, a staggering 105% increase.
Controversy Unveiled
Mustafizur Rahman, a customs agent, highlights the discrepancy, stating, "The CPA's claim of a 41% increase is nowhere near reality. Charges tied to the US dollar have gone up by more than 100%." Experts warn that many port charges are pegged to the dollar, making small and mid-sized operators vulnerable to exchange rate volatility.
FCL Handling Charges: A 63% Spike
The company's FCL clearance records show a similar escalation. In September, CPA billed for river dues, lift-on, and repair charges, totaling Tk3,564.29. In October, a comparable FCL release cost Tk5,826.38, driven by higher river dues, lift-on charges, and VAT. This amounts to a 63.47% increase.
Industry Impact
In an industry operating on tight margins, such a significant increase in logistics costs can erode competitiveness rapidly, especially for RMG exporters facing global price pressures and declining orders.
Compulsory Costs: 86% to 139% Jump
An internal shipping agents' report reveals the new tariff's true impact. For a 187-meter tanker, compulsory costs rose from $16,578 to $30,772, an 86% increase. Tug hire fees soared from $2,907 to $15,709, and pilotage costs doubled.
LPG carriers face even sharper increases, with compulsory service costs rising from $4,545 to $10,041, a 121% jump. Tug hire alone increased by 549%.
Coal carriers are hit the hardest, with compulsory costs surging from $34,298 to $81,929, a 139% increase. Tug hire skyrocketed to $31,418, and pilotage fees more than doubled.
Shipping Lines React
Global carriers initially attempted to recover these higher port charges through surcharges. CMA CGM announced an 'Emergency Cost Recovery Surcharge', but CPA responded by canceling anchorage and berthing permissions for their vessels. Under pressure, CMA CGM withdrew the surcharge and requested vessel approvals.
MSC and Maersk faced similar challenges, ultimately increasing marine freight instead, which raised the overall cost of containers and cargo.
Scrap Vessels: An Unfair Burden
Scrap vessel handlers express frustration with the new charges. Mosharraf Hossain, an agent, states that CPA now imposes tug fees on vessels that don't use tugs, calling it an "unprecedented" 1,100% increase. Amirul Haque, managing director of Seacom Shipping, agrees, saying the actual increase is more than double what CPA claims.
The Future: A Meeting on 10 November
CPA has called a meeting with port users on 10 November to discuss the revised tariff schedule. The meeting follows protests, legal challenges, and warnings from business groups. The High Court has also issued a rule questioning CPA's decision.
Omar Faruk, CPA secretary, defends the policy, stating that the 41% hike is an average. Stakeholders await the meeting to see if CPA will offer relief or maintain the new structure. This meeting could determine whether Chattogram Port remains a trade facilitator or becomes another cost pressure point.
And this is the part most people miss...
The impact of this tariff hike extends beyond the port. It affects the entire economy, impacting the competitiveness of the country's exports and ultimately, the consumer.
What do you think? Is this tariff hike justified, or is it a burden that will hinder the country's economic growth? Share your thoughts in the comments!
