The Chittagong Port Authority (CPA) has brought new bad news for traders under pressure from the declining economy, foreign exchange crisis, and export.
The authorities are going to implement about a 41% tariff in the port's service sector from October 15.
Traders fear that this decision will significantly increase import and export costs.
They believe such an initiative in times of crisis will be a 'blow on the back' for business and trade.
According to the new notification, the tariff has been increased at Chittagong Port after almost four decades.
The last time the port service fee was increased was in 1986.
New rates
This time, the interim government issued a new notification and adjusted the tariff in 23 out of the 52 sectors of the port.
The notification stated that rent, tolls, fees, and charges will be collected based on the exchange rate of the dollar.
The rate per dollar has been set at Tk122. As a result, if the dollar price increases in the future, the fee will automatically increase.
The container handling sector has been affected the most.
The new tariff has been set at Tk16,243 per 20-foot container, which was previously Tk11,849.
This has increased by about 37% on average.
An additional Tk5,720 will be paid for import containers. An additional cost of Tk3,045 will be charged for export containers. An additional Tk3,000 will also be charged for each container movement.
This will increase the overall cost of the container handling sector by 25% to 41%.
It is worth noting that 92% of the country's seaborne imports and exports and 98% of container and goods transportation are completed through Chittagong Port.
It is expected that this new tariff adjustment will have a major impact on import and export costs.
Potential impact on economy
According to economists, the increase in tariffs will increase import costs on the one hand and export costs on the other.
This may further increase inflationary pressure at the consumer level due to rising commodity prices.
International buyers may turn to alternative sources, which will have a negative impact on foreign exchange earnings. Production costs will also increase due to increased costs of importing raw materials in the industrial sector.
Bangladesh's main export sector, readymade garment (RMG), is currently under pressure from US counter-tariffs, reduced orders, and the dollar crisis.
Traders in this sector are expressing fears that increasing port tariffs will further increase costs, which will weaken Bangladesh's competitive position in the international market.
International Business Forum Chittagong president and BGMEA director SM Abu Tayyab said: "The most pressure will be on the RMG sector, since additional charges will have to be paid once when raw materials are imported and again when exported."
Former BGMEA director Mohiuddin Rubel told Bangla Tribune: “The decision to increase the tariff of the Chittagong port will directly put pressure on the RMG industry.”
According to him, even if this additional cost is added to the RMG industry, it will not be possible to increase the price of garments in the international market.
As a result, the entire pressure of the cost increase will fall on the entrepreneurs, which will have a negative impact on the entire sector.
Concerned, he also said: “This will create a risk of workers’ salaries falling due; the amount of bank loans will increase. There is even a risk that some garment factories will close down due to this.”
Rubel further mentioned that instead of increasing the tariff by 41%, it would have been the most logical step to take initiatives to reduce unnecessary expenses in other sectors of the port.
Another garment exporter, requesting anonymity, said: “It is not possible to charge higher prices from foreign buyers these days. If the port charges increase, we will have to cover the costs from our profits. This will not make the business sustainable.”
According to traders, the cost of container handling, loading and unloading, storage, and shipping charges can increase by up to 20%-30%. In many cases, this will practically double the cost.
Government's rationale
Government sources say that the port's service charges have not been increased for 39 years. Additional revenue is needed to develop infrastructure, add modern equipment, and maintain international standards.
The new tariff for Chittagong Port has been determined after reviewing 10 ports in Asia and 17 internationally.
Chittagong Port Authority (CPA) secretary Md Omar Faruk said: "Importers currently pay Tk0.32 per kilogram of goods. At the new rate, it will be a maximum of Tk0.44. So, there will be no significant impact on the price of daily commodities."
However, experts say that the port is not a loss-making institution but rather generates huge revenue every year. In that case, how logical is it to impose the burden of additional tariffs on traders? That question remains.
What is increasing in the new tariff? According to the government notification, the highest tariff increase has been in container transport.
The tariff for a 20-foot container has increased by Tk16,243 (an average increase of 37%).
The cost of import containers is increasing by Tk5,720, and that of export containers by Tk3,045.
The tariff per kg of goods has increased from Tk1.28 to Tk1.75.
The cost of loading and unloading containers has increased from $43.40 to $68.
In addition, the waiting charge has also been increased if the ship is delayed. If the delay is more than 36 hours, an additional 900% charge will have to be charged.
Traders' protests ignored
Trade organizations have been objecting ever since the decision to increase tariffs was announced. They proposed a maximum increase of 10%-12%.
The same demand was raised in a meeting with Shipping Adviser Brigadier General (retd) M Sakhawat Hossain.
Despite the adviser's assurances, the traders' proposal was ultimately not implemented.
Bangladesh Shipping Agents Association chairman Syed Mohammad Arif said: “A meeting was called with business leaders from all over the country, but none of their proposals were taken into consideration. This is unfortunate for us.”
Impact on maritime trade
More than 3.2 million containers were handled through the port in 2024.
Users believe that the increased tariff will affect everything from imports of industrial products to the supply of raw materials and exports of ready-made garments.
Along with traders in the RMG sector, economists also say that in the current economic reality of Bangladesh, increasing the tariff by 41% at once is a major setback for business and trade.
According to the government's argument, despite infrastructure development and adjustments after a long time, according to traders, this decision will reduce competitiveness and put the investment environment at risk.
Earlier, according to the notification issued on the night of September 14, it was announced that the fees in various service sectors of the port would be increased by up to 41%.
But in the face of reactions from traders and concerned parties, the shipping adviser suspended it for a month on September 20.
