Sunday , March 18 2018
Breaking News
Home / International / Rising overseas trade brings joy for private ICDs

Rising overseas trade brings joy for private ICDs

Increasing volume of overseas trade is bringing businesses to private inland container depots (ICD), enabling operators to utilise more than 75 percent of their capacities, according to sector insiders.

Also known as off-docks, the 18 ICDs handled 46,078 twenty-foot equivalent units (TEUs) of export containers during the first seven months of the year, up 8 percent year-on-year.

Their handling of containerised imports rose 11 percent year-on-year to 26,419 TEUs in the first seven months of 2017, according to data from the Bangladesh Inland Container Depots Association (BICDA).

“Today, we, ICDs, are an integral part of the Chittagong port. We are silently contributing to the economic growth of the country,” said BICDA President Nurul Qayyum Khan.

The private off-docks handle 90 percent of containerised exports and 23 percent of import containers through the Chittagong port, the country’s biggest maritime port.

The journey of private ICDs began in the early 2000s by handling only empty containers.

Later in 2003, new operators namely Summit Alliance Port Limited (SAPL) ventured into the territory, when the Chittagong port handled about 6.24 lakh TEUs of containers.

A dozen of off-docks entered the scene during the tenure of the caretaker administration in 2007-08, said Khan. And over time, container handling by the ICDs increased.

In 2016, the off-docks handled 16.53 lakh TEUs of containers, up from 9.90 lakh TEUs in 2010, according to BICDA.

Handling by the private ICDs was 70 percent of the total 23.46 lakh TEUs of containers handled at the Chittagong port in 2016.

Kamrul Islam Mazumder, executive director and chief operating officer of SAPL, said the volume has risen but revenue has not increased as expected.

“Our operational cost has risen because of the spiral in wages, cost of transport and electricity.”

But the rates for handling export, import and empty containers as well as cargo have not risen to that extent, he said.

The rates have been revised upwards in 2016, but they are still below the 2005 level, he added.

Operators said the shipping lines, freight forwarders and the importers are the main clients of off-docks. Usually, the ICDs store empty containers of shipping lines after delivery of imported goods based on agreement with shipping lines.

The off-docks, on behalf of FFs, also pack export goods sent by manufacturers in containers and send those to the port for shipment, according to operators.

“We, the private ICDs, handle nearly 100 percent of the garment exports,” said Mazumder of SAPL, which alone handles 21 percent of the containerised exports.

SAPL has been running almost in full capacity to facilitate exports, he said.

Despite the increased volume, there is no rush of new investors to grab a slice of the growing pie of container flow to the Chittagong port in the coming years to feed the rising demand for export-oriented industries and domestic market-focused businesses.

Container traffic at the Chittagong port is expected to increase to 27 lakh TEUs in 2020 and 54 lakh TEUs in 2040, according to a recent paper by Asif A Chowdhury, managing director of K Line Bangladesh Ltd.

“Huge investment is required to establish a yard to facilitate export and import containers. A lot of land is also required,” said BICDA President Khan.

Mazumder said the rate of return is not very attractive to investors. BICDA Secretary Mohmmad Ruhul Amin Sikder said the increasing volume of containers has ensured viability of off-docks.

But those who have been in the trade for quite a long time have hit break-even and are now starting to make profit. The prospect of making profit is low in the short term, he added.

Operators said private off-docks handle 37 import items and the scope for handling increased number of imported containers will raise the business viability.

A spike in rates for container handling and empty container storage will attract fresh investment for off-docks, they added.

AFM Abdullah Khan, commissioner of Customs House, Chittagong, said off-docks are working as an extension of the port.

He said the ICDs now handle import items that face zero to 5 percent duty.

To handle more import items, off-docks should set up scanners and increase their handling equipment, he said.

Asif A Chowdhury, also a director of the Bangladesh Freight Forwarders Association, said the volume of containers has exceeded the capacity of ICDs.

“We need more off-docks as the volume is rising,” he said, adding that the Chittagong port can also build off-docks to facilitate faster shipment and trade.

About pranto

Leave a Reply

Your email address will not be published. Required fields are marked *