The Covid-19 pandemic harmed almost all the businesses across the world, but it came as a boon to the Bangladeshi flag carrier cargo vessels. In the last two years, 32 ships were added to the fleet of domestic flagships.
There were 48 Bangladeshi flag carrier vessels till 2019. After the Covid-19 pandemic hit, Bangladeshi shippers registered 14 ocean-going ships in 2020 and 18 more in 2021. As a result, investment in the sector increased by at least $500 million and reached $2 billion.
The Karnaphuli Group, one of the most reputed business conglomerates in the country, joined the shipping sector in 2020 with two Bangladeshi flag carrier ships and added four more cargo vessels since then. These ships carry imported and exported goods between the Chattogram Port and the ports in Singapore, Colombo and Port Klang.
Karnaphuli Group Director Hamdan Hossain Chowdhury talked with The Business Standard correspondent Shahadat Hossain Chowdhury about the potentials and challenges in this sector.
TBS: Why did Karnaphuli Group decide to invest in the shipping sector amid the Covid-19 pandemic?
Hamdan: Venturing into the shipping business was a natural transition for Karnaphuli Group, as we were already involved in agencies and logistics related to this business since the independence of Bangladesh. The concerns of our group are involved in approximately 40% of the container movement through the Chattogram port in one way and another.
The decision to invest in this sector was driven by the legislation introduced by the government in 2019 to facilitate and encourage ownership of ocean-going vessels by Bangladeshis. The global pandemic did not have any bearing on our investment plans.
How much has Karnaphuli Group invested in this sector?
The current asset valuation of our six container vessels is approximately $90 million.
What is the potential for investment in this sector?
Shipping is a very capital-intensive sector, which is exposed to many risks. Looking at the sector historically, one can see that there are many ups and downs, good times and bad times. Given that the Bangladesh economy continues to be robust and resilient, there is good potential in this sector.
Moreover, investment in this sector will create much-needed employment opportunities for Bangladeshi seafarers and also save billions of dollars which the Bangladeshi traders currently pay to foreign shipping companies.
So, in many respects, Bangladesh's interest is strategically served by the shipping sector. We are extremely proud and privileged to carry the Bangladesh flag across the seas.
How many containers have the Karnaphuli Group handled so far?
Since commencing our services in July 2020, we have carried over 2.76 lakh twenty-foot equivalent units (TEUs) of containers between the Chattogram Port and the major transhipment hubs in Colombo, Singapore and Port Klang.
In our first year of operations on the Chattogram-Colombo corridor, we have established ourselves as a major player by occupying 25% of the market share.
What sort of problems are you facing currently?
As the number of Bangladeshi flag carrier vessels increases, it is important to further streamline the priority berthing arrangement for these vessels at local ports. It is also necessary to ensure that the Bangladesh Flag Vessel (Protection) Act, 2019 is implemented fully as soon as possible.
We must also keep in mind that Bangladesh needs to have a pool of qualified seafarers to man the increasing number of Bangladeshi flag carrier vessels. Until such a pool is developed, the government should facilitate the process of recruiting foreign nationals in these ships, which is a common practice in other countries that face similar challenges.
Do you have a plan to add more ships to your fleet?
We are working constantly to develop our network. We hope to make an announcement in this regard by the first quarter of this year.