CPA to slap penalties on overstaying containers

FT ONLINE 

The Chittagong Port Authority (CPA) has asked businessmen to take faster delivery of imported containers from the port yard to ensure smooth and uninterrupted supply of goods ahead of Ramadan.

The CPA has also threatened to penalise importers who delay in taking delivery of containers, because the port yard is on the verge of reaching full capacity.

The Chittagong port has a storage capacity of 49,018 TEUs (twenty-foot equivalent units). However, its yard was cluttered with 40,039 TEUs on average every day in the last month, taking up 82 percent of the capacity, said sources.

On February 6 this year, the highest number of containers – 44,987 TEUs occupying 92 percent storage capacity – were lying around at the yard.

Containers that are not cleared on time cause container congestion, thereby hindering the port's operation, which leads to price increase of goods in the local market. The port faces container congestion at its yard every year ahead of Ramadan.

The president of the Bangladesh Shipping Agents' Association, Ahsanul Haque Chowdhury said, "Some businessmen deliberately do not take delivery of their goods from the port yard because they are waiting for the price to increase in the market by creating an artificial supply shortage."

"They sell those goods at a higher price in the month of Ramadan. We agree with the port authority on imposing the penalties."

This year, the holy month will begin in April.

He further said, "Some importers do not own warehouses, so they use the port yard to store their goods because the cost of storing it outside the port is comparatively higher."

The Chittagong port is grappling with more and more container congestion at the port yard with every passing day, because every year the import-export container handling growth is increasing.

According to sources, in the last five fiscal years from 2014-2015 to 2018-2019, a container lay at the port yard for an average of 14 days after being unloaded from a ship. Excluding the four-day grace period, importers have to pay $6 per day for every overstaying container.

During that five-year period, the port handled 6.35 million TEUs of imported containers, and overstaying charges for those containers was around $36 million.

Businessmen add this cost to the import price, so in the end, the overstaying charge comes out of the consumers' pockets.

On February 4 this year, the CPA issued a notice through newspapers to importers, clearing and forwarding (C&F) agents and people concerned to take quick delivery of the imported FCL (full container load) containers, and threatened to impose penalties otherwise.

The notice read, "Number of containers stored in the port is increasing day by day due to slow delivery. Everyone is requested to take delivery of their storage containers without delay to help maintain smooth and normal operation at the port.

"We will wait seven days, and unless the situation is improved by this time, a penalty will be imposed."

After the four-day grace period expires, port users have to pay $6 and for every 20-foot container, and $12 for every 40-foot container for each day onwards. In 2016, the CPA imposed penalties with the charges as the storage capacity was almost maxed-out due to slow delivery of import containers that year.

Since the situation has not improved, the CPA Traffic Department wrote to the Ministry of Commerce, Ministry of Shipping, president of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI), the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Shipping Agents Association and the Chattogram Chamber of Commerce and Industry (CCCI) on March 4 this year.

In the letter, signed by Traffic Director Enamul Karim, the CPA expressed concern over the ongoing congestion of containers at the port, and asked businessmen to take quicker delivery.

The letter also mentioned that different types of commodities including onions, garlic, chickpeas, and date palm are waiting to be unloaded. Many ships are coming to Chittagong port with goods needed for Ramadan.

If these commodities are not delivered from the port yard, there will be a supply shortage in the market. The shortage will negatively impact the market because the prices of the goods will go up, read the letter.

It also pointed out that in the holy month of Ramadan, taking delivery of goods from the port is absolutely necessary to keep the commodities market stable. The matter is also integral to ensuring smooth port operation, and container and vessel handling at the port.

"A large volume of goods is imported ahead of Ramadan. If the importers do not take delivery on time, the port will face vessel and container congestion. It is our request to businessmen that they arrange for removal of their containers from the port as soon as possible," CPA Traffic Director Enamul Karim said.

Meanwhile, president of the CCCI and Port Users' Forum, Mahbubul Alam said, "We always encourage businessmen to take quick delivery of their containers, so that the port gets enough space to run its operation smoothly.

"But it takes time for the documents to arrive here from abroad. Moreover, some lengthy processes at the custom house is causing overstay of containers at the port yard."

He further said, "We have asked the National Board of Revenue (NBR) to speed-up the process of documentation. But the NBR has yet to implement fully automated systems, and the customs department does not have a sophisticated laboratory to examine all the items.

"Sometimes they send items to Dhaka and to some other labs for testing, which takes time. They should have a one stop service under one roof, only then will the delivery system become smoother and more transparent."