Increased tariff at container terminals to hike business cost
OWNERS of the 19 private inland container depots increased their tariffs amid strong opposition from businesses and in violation of the ICD Policy 2016. According to the policy, the Bangladesh Inland Container Depots Association (BICDA) needs to first apply to the Ministry for a tariff review, while only a tariff committee can propose revised tariffs. Those, in turn, need to be approved by the Ministry.
The BICDA, however, say the last increase in tariff around three years ago was not enough and the latest committee has done next to nothing to revise the rates since. The Shipping Ministry held a meeting with all the businesses on the decision of tariffs, but failed to reach a consensus. The Bangladesh Garment Manufacturers and Exporters Association directed the Clearing and Forwarding Agents not to pay the new charges, creating uncertainty over timely shipment of many export cargoes. Due to the latest increase in the 12 types of service charges for landing, stuffing, labour, documentation and lifting, among others, the cost of total exports and imports would rise by around Tk 150 crore annually.
Owners say the increased costs are a result of devaluation of local currency against the US dollar and a rise in overheads such as fuel, labour and equipment maintenance. BICDA President said upon insistence from the stakeholders and requests by the CPA, they had agreed to an increase of 20 percent only. The disparity in the increase in operational costs and the rates being charged by the depots resulted in the ICDs struggling to maintain operational efficiency, he said, adding that they were forced to revise the tariffs to save the sector.
It is obvious that a neutral appraisal must be done to see if the increase in charges is merited due to higher costs of the inland providers or if they are simply a way to make additional profits. If it is the latter than they must reduce their prices. However if the increase is justified then BGMEA must not be allowed to bully them.
The BICDA, however, say the last increase in tariff around three years ago was not enough and the latest committee has done next to nothing to revise the rates since. The Shipping Ministry held a meeting with all the businesses on the decision of tariffs, but failed to reach a consensus. The Bangladesh Garment Manufacturers and Exporters Association directed the Clearing and Forwarding Agents not to pay the new charges, creating uncertainty over timely shipment of many export cargoes. Due to the latest increase in the 12 types of service charges for landing, stuffing, labour, documentation and lifting, among others, the cost of total exports and imports would rise by around Tk 150 crore annually.
Owners say the increased costs are a result of devaluation of local currency against the US dollar and a rise in overheads such as fuel, labour and equipment maintenance. BICDA President said upon insistence from the stakeholders and requests by the CPA, they had agreed to an increase of 20 percent only. The disparity in the increase in operational costs and the rates being charged by the depots resulted in the ICDs struggling to maintain operational efficiency, he said, adding that they were forced to revise the tariffs to save the sector.
It is obvious that a neutral appraisal must be done to see if the increase in charges is merited due to higher costs of the inland providers or if they are simply a way to make additional profits. If it is the latter than they must reduce their prices. However if the increase is justified then BGMEA must not be allowed to bully them.
