Exports caught in container backlogs at ICDs 
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MONDAY, FEBRUARY 06, 2023
Exports caught in container backlogs at ICDs 

Trade

Shamsuddin Illius
03 July, 2021, 10:55 pm
Last modified: 04 July, 2021, 01:22 pm

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Exports caught in container backlogs at ICDs 

The 19 off-docks in the country have cumulative capacity to store 10,000 TEU export containers, but over 14,000 TEU of export-laden boxes are now waiting there for shipping

Shamsuddin Illius
03 July, 2021, 10:55 pm
Last modified: 04 July, 2021, 01:22 pm
Exports caught in container backlogs at ICDs

The country's inland container depots (ICDs) that handle almost 100% of the export goods are clogged up with export containers due to a shortage of vessels and congestion at transhipment ports such as Singapore, Colombo and Port Klang, causing the export activities to hit a snag.

This crisis is also causing freight charges to skyrocket, said shippers and the Bangladesh Freight Forwarders Association (BFFA).

According the Bangladesh Inland Container Depots Association (BICDA), the 19 ICDs, also known as off-docks, can collectively store 10,000 TEU (twenty-foot equivalent unit) export containers but currently over 14,000 TEU of exports-laden boxes are waiting for shipping at the ICD yards.

The association said usually it takes 2-3 days only to send a container from the ICDs to Chattogram port for loading to the vessels, but it is now taking 7-10 days for the same process, which has led to huge tailbacks of exports-laden vehicles in front of the ICDs as well.

Ruhul Amin Sikder, secretary of the BICDA, told The Business Standard export containers are stockpiling at the ICDs as their shipping is being delayed owing to a shortage of vessels.

Container backlogs at ICDs
Photo: TBS

The crisis has been there for the last couple of months and is getting severe day by day, according to the BICDA.

The association's President Nurul Qayyum Khan on 1 July in a letter to the president of Bangladesh Freight Forwarders Association (BFFA) said, "Forwarders also are giving cargo loading plan (CLP) quite late, which makes export goods stay in our container freight stations (CFS) for a longer period than usual, causing the CFS to stretch beyond capacity.

The prolonged stay of export containers occupying places results in "trucks with new export cargoes coming to the off-docks face delays in getting unloaded," he mentioned.

"Due to this, the total operational cycle has become quite sluggish, impacting the productivity of the ICDs."

The letter was also sent to the Chittagong Port Authority, the Federation of Bangladesh Chamber of Commerce and Industries, the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association, mentioning how the ICDs are suffering due delays in loading export boxes to ships.

A senior official of the ICD named Incontrade Limited, on condition of anonymity, told The Business Standard, "Many export goods-laden vehicles like covered vans and trucks are standing in a long queue in front of our ICD for 2-3 days but there is no space here to unload the containers now."

Container backlogs
Photo: TBS

Mentioning that the ICD has a capacity to store 2,000 TEU of export containers, he further said the entire space is occupied as many export boxes are lying at the ICD yard for over a week due to delays in loading to the vessels.

Syed Mohammad Tanvir, managing director of Pacific Jeans Ltd – one of the country's leading exporters, termed the crisis as "a great disaster for export".

He told TBS, "Our 27 export laden covered vans are waiting for 3-4 days in front of ICDs for unloading at CFSs but they cannot get unloaded due to inadequate space in the ICDs. We have to count a demurrage for prolonged stay of trucks and covered vans in front of the ICDs."

"The shipment delay is also delaying our payment because of late submission of documents. This is creating a cash flow crisis for us and slowing down our overall export growth," said Tanvir, also a vice president of the Chittagong Chamber of Commerce and Industry (CCCI).

Shamsuddin Ahmed Chowdhury Minar, vice-president of Galaxy Bangladesh (mother company of GBX Logistics), the local agent of German container shipping company Hapag-Llyod that carries around 10-11% export and 13-14% import of Bangladesh's containers, told TBS, "Disruption in mother vessel schedule and feeder vessel backlogs cause a crisis in carrying inbound and outbound containers. Feeder vessels usually make 2 to 2.2 voyage per month during normal period between Chattogram to transhipment ports, but the number of voyage has now come down average 1.5 per month because of berthing delays in transhipment ports amid congestions." 

After the stuffing of export goods into the designated containers, the ICDs send a stuffing report to the shipping lines concerned to obtain nomination of vessels against the export containers and subsequently they send the containers to Chattogram port to get them loaded to the designated vessels.

The shipping lines said they are failing to ensure the schedule due to shortages of vessels. 

Container truck
Photo: TBS

When contacted, Khairul Alam Suzan, director of Bangladesh Freight Forwarders Association, told TBS, "Earlier, the trade was both-way as both exports and imports were normal and there was a balance. As imports have fallen (amid the pandemic), a shortage of containers has been created. This is because containers that come with import goods are sent with export goods later."

"Many non-essential items like toys used to be imported from Europe, which is stopped now. Most importers are currently importing essential items only. This also is responsible for trade imbalance. So, many vessel operators are not operating large vessels. Moreover, vessels stuck in the Suez Canal have led to congestion at transhipment ports.

"We don't know how this problem will be resolved. We also can't understand where the situation is going."

Expressing deep concerns over the issue, Mahbubul Alam, president of the CCCI, said, "This will cause us to lag behind in the competitive market. In this situation, arrangements of special feeder vessels to carry goods to transshipment ports will mitigate the crisis to some extent."

BGMEA First Vice President Syed Nazul Islam told TBS, "This delay in shipping will have a long-term impact in Bangladesh's exports. We are expecting some orders in the upcoming Spring and Summer but this crisis may affect our orders if we fail to deliver goods in time."

Bangladesh-bound import containers are also facing congestions at transhipment ports.

Amid huge congestions at Singapore port Hapag-Lloyd, a German container shipping company has suspended its booking of import containers bound for Bangladesh via Singapore for a month since 24 June.

Hike in freight charges

According to the BFFA, freight charges have almost tripled on the two most regular routes – Europe and the USA – from Bangladesh when compared to the pre-pandemic time. 

Around 80% of Bangladesh's export goods are transported through these two routes, mentioned BFFA Director Khairul Alam Suzan, adding, "The freight charge for a 40 sq ft container on the route to Europe was $300-$3,500 before the pandemic, which is now $10,000-$12,000. During this time, the freight charge of a USA-bound 40 sq ft container has increased from less than $5,000 to over $9,000."

BGMEA First Vice President Syed Nazul Islam said, "We are also concerned over the hike in freight charges, as buyers reduce our cutting and manufacturing prices due to high freight charges. This will cause us to lose competitiveness in the market."

Bangladesh / Economy / Top News

exports / Container backlogs / ICDs

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