The Bangladesh Garment Manufacturers and Exporters Association (BGMA) has demanded the withdrawal of the congestion surcharge imposed by feeder vessel owners since 15 November this year.
Feeder vessels operating to and from Chattogram Port, Colombo Port, Singapore Port, and Port Klang have imposed surcharges of $75 per goods-laden 20-foot container and $37.50 per empty container creating congestion – as an emergency cost recovery surcharge (ECRS).
BGMEA Vice president Abdus Salam sent two separate letters on 19 November to the Chittagong Port Authority and Bangladesh Shipping Agents Association (BSAA) to take immediate steps to withdraw the congestion surcharge.
He said due to the Covid-19 pandemic, the apparel manufacturing sector and other industries are facing a disastrous situation.
"In this present economic recession, feeder vessels hiking fares is completely unreasonable and unacceptable," he said in the letter.
He also said global retailers have already suspended or cancelled work orders worth around $3.8 billion which has created uncertainty for factories and workers, and the trend is continuing.
Salam said in the letter that increasing the fare could raise the import cost of raw materials and buyers may not pay exporters the full price for finished goods.
"As a result, Bangladeshi ready-made garments may lose their competitiveness," he added.
However, BSAA President Ahsanul Huq Chowdhury told The Business Standard, "The feeder vessels are realising the increased amount from mainline operators, so the surcharge has no impact on the Chattogram port."
"The feeder vessels bear over $10,000 per day as an operational cost for delays and congestion at the ports. So, the surcharge has been increased," he added.
Meanwhile, the feeder vessel owners said they are facing unprecedented delays at Colombo Port, Singapore Port and Port Klang. The feeder vessels are facing congestion and berthing delays up to 48 hours at the ports – which is diminishing their productivity. So, they are trying to recover their losses by hiking surcharges.
"In order to recover part of these additional costs and maintain a viable feeder service, we have no option but to impose an ECRS," said Transworld Feeders FZCO in a letter to its clients.