Port charges quadrupled causing rise in prices of imported goods
Reza Mahmud :
To keep the prices of imported goods at a tolerable level for consumers, all types of charges imposed at ports must be reduced, said Md. Shahidul Haque Molla, former Director of Federation of Bangladesh Chambers of Commerce and Industry(FBCCI) and convener of the Committee to Prevent Discriminatory Taxation.
The business leader said the quadrupling of port charges has already led to a surge in prices of all imported goods, which ultimately the general consumers are forced to bear. Criticizing the fourfold increase in container charges at ports, he stated that this decision was not justifiable in any way.
In an exclusive interview with The New Nation recently, Shahidul Haque Molla said this demurrage charge of the port, in the current crisis, is unbearable for entrepreneurs and importers.
As a result, the prices of imported goods have gone up further, fueling inflation. Since containers are leased from foreign companies, the charges, including delay fees, are paid in U.S. dollars, leading to a significant outflow of foreign currency from the country. Additionally, port congestion is becoming a daily issue, driving costs even higher. If port charges are not reduced soon, the private sector is feared to face severe pressure.
Md. Shahidul Haque Molla, also a top leader of the Bangladesh Agricultural Machinery Merchants Association (BAMMA) and Bangladesh Electrical Motor Parts Importers Association, further mentioned that earlier, electrical motor imports did not require testing by BSTI (Bangladesh Standards and Testing Institution). But now, these motors are subjected to tests, causing unnecessary delays, even though they already come with certificates from foreign labs.
Therefore, retesting is unnecessary and eliminating it would reduce harassment of businesspeople.
He added that under the current system, it is almost impossible to clear and release goods from the port within the allotted free days. Especially if a ship arrives on Thursday, it automatically falls into the weekend closure on Friday and Saturday. So the so-called free days are effectively lost.
Moreover, during Eid and other festivals, executive orders often impose 10-12 days of holiday, during which no port operations take place. Yet, even during these closures, businesspeople are forced to pay substantial charges.
In particular, imposing excessive port charges on agricultural machinery imports has a direct negative impact on farmers, potentially threatening food security. Hence, during the upcoming Eid-ul-Azha holiday, the government should refrain from imposing such charges. This would help restore business confidence.
It is noteworthy that after containers are unloaded from ships, importers are allowed to keep them at the port for four days free of charge. However, many importers are unable to take delivery within that period, leading to congestion at the ports. On March 10, the port authority increased container charges fourfold. As per the new rate, after the free period, for a 20-foot container, charges are:First 7 days: $24 per day, Next 13 days: $96 per day, Following 21 days: $192 per day.
Similarly, for a 40-foot container: First 7 days: $48 per day, Next 13 days: $192 per day, Following 21 days onward: $384 per day.
The business leader added that due to complications with customs clearance and other issues, containers often remain in the port for 15-20 days. Now, with the increased charges, demurrage can amount to as much as $400 for some containers. The fourfold hike in port charges will harm all industrial sectors. If port charges are rolled back to previous levels, both imports and exports will increase, and trade and commerce will regain momentum.