Exporters, off-docks lock horns over tariff hike

Apparel exporters defy enhanced container-handling tariffs as the port-service receivers and private off-dock operators locked horns over a recent raise in port charges as an aftereffect of diesel- price hike.
Apparel exporters and shipping agents challenge that the private off-docks cannot hike charges unilaterally, without any tariff-committee approval, and call it 'monopolistic'.
Off-dock operators, on the other hand, question justification for having a tariff committee for only private off-dock operators as no other private-sector operators do need such approval.
BGMEA first vice-president Syed Nazrul Islam hinted at launching legal action unless the disagreements resolved regarding port-charge hike through mutual consultation.
"The private port operators have charged the revised cost since November 4, 2021 but apparel exporters are not paying it," he told the FE.
The service-seekers will sit for a meeting Monday (today) to discuss the issue, he said.
Bangladesh Shipping Agents Association chairman Syed Mohammad Arif said shipping lines have got long-term contract for six months to one year under certain conditions with international buyers on export-import costs.
"We are not against upward revision of the port charges but it should be imposed on the basis of consensus between the stakeholders," he said.
Cost of fuel consumptions has to be assessed first before increasing the charges, he argued against the charge hike that they say would add up to shipment costs and cut down the country's competitive edge on the export market.
"The off-dock operators have increased the charges on retrospective effect from November 4, 2021 by issuing circular on November 8, 2021 without giving us a breathing space," he said.
The shipping-line operators would request the Chattagram Port Authority (CPA) to sit with all stakeholders to resolve the issue, he added.
Bangladesh Inland Container Depot Operators Association (BICDA) president Nurul Qayuum Khan said the ICDs had increased charges for only five services, out of its 23, assessing fuel consumption.
He said some of the exporters and importers started paying the charges while others are making "a hue and cry centering off-dock charge hike only ignoring other sectors' cost hike".
On November 15, Lighterage association also increased their changes by 15 percent but no such repercussion created on this, he pointed out.
BICDA said the increase in cost for exporters and shipping-line operators would be lower than rises in other expenditures, including trucking and shipping-freight charge.
In an analysis the BICDA shows that the recent hike in its charges may cost Tk 550 million additional for obtaining port services by apparel exporters and importers.
For shipping-line operators, the cost of off-dock in a year would increase by Tk 1.10 billion.
"It surprised us as any logical hike in private ICD charges is portrayed with extensive impact on export-oriented sector," the association president wrote in a letter to the apex apparel exporters' association.
Earlier, both BGMEA and BSAA had sent letters to the BICDA and the BICDA replied those accordingly with details of its analysis regarding cost increase for off-dock charges.
In a letter, dated November 10, to the BICDA president, the BGMEA first vice-president, Syed Nazrul Islam, requested the ICD operators to scrap the recent hike in its charges for the sake of export-oriented sector.
On November 17, BSAA leader Syed Mohammad Arif in a letter requested private port operators to sit together to avoid unpleasant situation and misunderstanding.
BGMEA and BSAA requested the ICD operators to sit with the stakeholders before increasing the charges.
Challenging the legal aspects of the hike, both the associations referred to a provision (section 11, subsection 11.1) of the 'Private ICD/CFS Policy-2016' framed by the Ministry of Shipping. As per the policy, any of the charges on shipper, consignee, MLO, shipping agent and freight forwarder has to be determined by a tariff committee of the MoS and must have approval from the ministry before making it effective.
"It is not acceptable to increase the charges of ICD without approval of the tariff committee," BGMEA leader wrote.
Exporters have prepared a plan to dispose of the recent orders from the buyers as per recent cost of business that would go up as ICDs increased charges.
Responding to the BGMEA letter, BICDA president Nurul Qayyum Khan wrote transportation cost has increased forcing the operators to revise their charges upward.
"Container-handling equipment and container-transporting prime movers and other means of container movement are diesel- operated in ICD," he wrote in defence.
It is not possible to provide subsidy for the cost hike for the private operators who invested around Tk 150 billion in the ICDs, he added.
Annual cost of export-oriented sector due to increase in truck/covered-van rent would escalate by Tk 2.87 billion.
Increase in freight charges of shipping lines also cost Tk 362.35 billion in additional charges to the exporters.
The BICDA leader said hike in transportation or freight charges didn't stir such discussion and criticism as ICD charge hike did.
He lamented the negative perception on private ICDs is affecting smooth flow of import-export trade in the Chattogram seaport.
On November 4, 2021, the off-dock operators jacked up their charges by 23 per cent to align their cost with the 23-per cent increase in diesel prices and up to 35 per cent rise in transportation cost.
In its estimation, BICDA said per-container charge has been adjusted to Tk 952 for a 20-foot export container from stuffing to sending to the port while it has been fixed Tk 1270 for 40/45-foot containers.
Verified Gross Mass which needs lift-on and lift-off once and internal transportation twice has been adjusted to Tk 265.
To the BSAA, the BICDA president said the annual trucking cost increased by approximately Tk 9.50 billion while cost of export- loaded containers by Tk 538.9 million, import-loaded containers Tk 383.3 million, empty containers Tk 187.6 million.
It said export-import shipping freight charges in a year increased by Tk 896.06 billion.
There is no tariff committee for commercial trailer operators or truck operators, covered-van operators, shipping line or shipping agents, freight forwarders.
Increase in the five charges of the private ICDs is inevitable and there is no way the ICDs can go on a reverse gear from the increase, the BICDA present writes to the BSAA.

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