Importers, freight forwarders at loggerheads over DSC

Pankaj Dastider | Published: August 10, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

CHITTAGONG, Aug 9: Importers, particularly in the readymade garment (RMG) sector, are incurring immense financial loss everyday on account of destination service charges (DSC) realised by freight forwarders (FF) for what they say faulty procedure of submitting import general manifest (IGM) and delivery order (DO) of consignment (Challan) by FFs against the rules of International Chamber of Commerce (ICC).
They said FFs are charging an amount of Tk 3,500 on per twenty-foot equivalent unit (TEU) container with import cargo as DSC from importers and the amount stands at Tk 14 million on all imports per day that causes them immense financial loss which is ultimately borne by common people of the country.
Vice President of Chittagong Metropolitan Chamber of Commerce and Industry (CMCCI) AM Mahbub Chowdhury in a letter to the Governor of Bangladesh Bank and NBR (National Board of Revenue) Member (Customs) Farid Ahmed on August 6 urged them to set the system of submitting IGM and DO of Challan to the Customs House by shipping company or carrier instead of freight forwarder which would relieve them of the loss.
The FFs said they are charging the DSC as per international rules set in the Incoterms 2000 (International Trade & Commerce) as delivery charges to final destination (DSC) or Delivery Order fee (DO fee) to be borne by the buyers, not sellers.
The CMCCI leader said as per the ICC and UNCTAD rules the freight forwarders get the agents' commission from their principals but the Bangladeshi agents ignore the rules and claim charges from the importers concerned by holding delivery of their cargo.
"The ICC has clearly stated that the forwarders' document fee will be derived from the sellers of the consignment in the case of CFR (cost and freight)-based import. On the other hand, it has been stated in the Section 18A of Bangladesh Foreign Exchange Regulation Act (FER Act) 1947 that all necessary costs of the forwarding agents have to be brought to the country in foreign exchange from its principal," he said in the letter.
He further said that the Chittagong Port Authority (CPA) under the CPA Ordinance 1986 has issued a circular as per international rules that 'the freight is prepaid' in the case of import on the CFR basis until reaching the consignment to the importers' destination. They also give an undertaking to abide by the rules of the port.
When contacted, Khairul Alam Suzan, Director, Public Relations (Chittagong) of Bangladesh Freight Forwarders Association (BAFFA) said in the free market economy (consumer's law) the NBR cannot fix any rate of the licensed business organisation.
He said the freight forwarders have been realising the DSC from importers as it is being realised in other countries including India, Pakistan, Sri Lanka, Dubai, China, Hong Kong, Singapore, Malaysia, the UK, Europe and the USA.
The rate was Tk 2,000 per TEU container and has been increased to Tk 3,500 per TEU container from July 16 last.
He said the NBR in its reply to the president of the BGMEA (Bangladesh Garment Manufacturers and Exporters Association) dated July 15, 2014 requested the BAFFA not to increase the rate from Tk 2,000 to Tk 3,500 per TEU container but the rate had earlier been fixed at the meeting of the freight forwarders.
He said the decision on enhancement of the DSC claimed by the FFs was discussed in the meeting held at the Chittagong Customs House on February 9, 2014 and the meeting decided to fix it within March 30.
"The previous charge of Tk 2,000 per TEU container will be in force until it is further re-fixed by the freight forwarders within March 30, 2014," the resolution dated February 9, 2014 reads, he said adding that the authorities concerned did not decide on the matter within the time-frame.