Ctg port doubles store rents to ease container congestion
Businessmen say doubling the rents will not solve the problem, but rather may affect prices
- Double store rents if containers are not released within 11 days of landing
- Port authority says the decision is expected to smoothen port operations
- Traders argue the move may affect prices instead of easing container congestion
- The port witnesses a surge in imports ahead of almost every Ramadan
- Many businessmen use the yard as storage as they do not have warehouses
In the wake of the piled-up containers ahead of Ramadan, the Chattogram Port Authority has doubled storage rents for importers who fail to release their consignments within 11 days of unloading.
Chittagong Port Authority Secretary Omor Faruk told The Business Standard that the new rates would be effective from 8 March.
But businessmen and clearing and forwarding (C&F) agents said the port authority should reconsider the decision as the move may result in price hikes instead of resolving the container congestion.
According to port sources, importers can store containers in the port yard without any charge for four days after unloading. After the four days, a 20-foot container costs $6 per day for the first week, and $12 per day for the second week. Then from the third week, the charge increases to $24 per day.
On 28 February, the port authority said doubled store rents had been slapped on regular container rents after 11 days of the common landing.
According to the new rates, importers will have to pay $24 daily for the first week after the 11-day, and $48 daily after 21 days.
The notice, signed by Chattogram Port Authority (CPA) Traffic Director Enamul Karim, said sluggish container delivery from the port had been leading to congestion, and the decision had been taken to facilitate smooth port operations.
Chattogram port can accommodate at most 49,018 containers. But port officials said 15% of the port capacity had to be kept empty for smooth operations. Container-laden vehicles would be at risk of accidents if the 15% space was occupied.
As of Monday morning, there were 39,778 containers in the port yard – occupying around 77% capacity of the port.On 28 February, the port yard had 40,377 containers – around 82% percent of its capacity.
According to the port's performance data, piled up containers in the yard had been dropping until mid-January since the beginning of the year. Then the number of containers in the yard was on a rise again till mid-February.
Port sources said an average of between 4,500 and 5,000 containers were being delivered daily from the port yard. But the delivery fell to 3,000, and now hovers around 3,500 containers per day.
Why do congestions rise around Ramadan?
According to the port authorities, imports through the port increase ahead of Ramadan. Many businessmen use the port yard for storing the goods since they do not have their warehouses. As a result, the port authorities face container congestion in almost every Ramadan.
Ahsan Khaled, president of the Chaktai Wholesalers' Association, told TBS that many importers did not supply the imported goods as they arrived in order to pursue price hikes. The tendency is more common regarding dry Ramadan essentials like grams as they do not rot quickly.
Is doubling the charges a solution?
Businessmen said though the port was open every day, bank closure-led transaction issues on weekends reduced container delivery. Besides, the Chattogram Customs House did not examine products on weekends and public holidays.
They say if port-related offices do not improve, Chattogram port's performance will remain poor.
Kazi Mahmud Imam Bilu, the first joint general secretary of the Chattogram C&F Agents Association, said, "We expect the Chattogram Port Authority to reconsider doubling the store rents. Both businesses and consumers will be benefited if the issue can be resolved by other means."
Mahbubul Alam, president of Chattogram Chamber of Commerce and Industries, said importers in many cases could not take delivery in time due to some issues, including documents.
"On the other hand, the pandemic-led crisis has not ended. Doubling rents at this time could affect market prices. The port authority should reconsider it," he said.
Mahbubul Alam also suggested that businessmen should receive their imported consignments from the port on time.