Fixed charge hits freight forwarding business
Sunday, 25 November 2007
Jasim Uddin Haroon
The country's freight forwarding business has been experiencing a downturn mainly due to the imposition of fixed charge by the government on the import consignments.
Moreover, cancellation of the terminal handling charges is also blamed for the slump in the business, said freight forwarders.
The business started in early 1980s after the introduction of containerised trade in the country. It grew faster in the country in 1990s and the pace continued until the recent past.
Currently, the government fixed the charge at Tk 1250 for handling each import consignment.
Earlier, the rate was Tk 2500, fixed by the International Freight Forwarding Agents of Bangladesh (IFFAB).
But, some freight forwarding organisations were realising the charge even at a higher rate as they used to issue no objection certificates (NOCs).
The IFFAB claimed that those who used to charge exorbitantly were not their members. The association was against the realisation of higher charges from exporters and it favoured smooth growth of the business in the country.
The Chittagong Port Authority (CPA) also suspended realisation of the terminal handling charges (THC) locally.
Earlier, the freight forwarders used to charge Tk 170 on each cubic metre of the export item and a part of it was deposited to the CPA as a port charge.
But, now the overseas buyers of different items, including apparel, will bear the THC.
While talking to the FE, senior leader of the IFFAB Syed Badrul Hoque said that many freight forwarders were showing reluctance to remain in the business due to fall in their profit margin.
President of the IFFAB Aminul Islam Mizan told the FE that government's decision on withdrawal of THC hampered the business greatly despite the fact that the business has a bright prospect.
Currently, around 600 freight forwarders, including around 20 foreigners, are doing business in the country.
Mizan also said the government should have fixed the charges after a thorough study on the business for its sustained growth.
The country's freight forwarding business has been experiencing a downturn mainly due to the imposition of fixed charge by the government on the import consignments.
Moreover, cancellation of the terminal handling charges is also blamed for the slump in the business, said freight forwarders.
The business started in early 1980s after the introduction of containerised trade in the country. It grew faster in the country in 1990s and the pace continued until the recent past.
Currently, the government fixed the charge at Tk 1250 for handling each import consignment.
Earlier, the rate was Tk 2500, fixed by the International Freight Forwarding Agents of Bangladesh (IFFAB).
But, some freight forwarding organisations were realising the charge even at a higher rate as they used to issue no objection certificates (NOCs).
The IFFAB claimed that those who used to charge exorbitantly were not their members. The association was against the realisation of higher charges from exporters and it favoured smooth growth of the business in the country.
The Chittagong Port Authority (CPA) also suspended realisation of the terminal handling charges (THC) locally.
Earlier, the freight forwarders used to charge Tk 170 on each cubic metre of the export item and a part of it was deposited to the CPA as a port charge.
But, now the overseas buyers of different items, including apparel, will bear the THC.
While talking to the FE, senior leader of the IFFAB Syed Badrul Hoque said that many freight forwarders were showing reluctance to remain in the business due to fall in their profit margin.
President of the IFFAB Aminul Islam Mizan told the FE that government's decision on withdrawal of THC hampered the business greatly despite the fact that the business has a bright prospect.
Currently, around 600 freight forwarders, including around 20 foreigners, are doing business in the country.
Mizan also said the government should have fixed the charges after a thorough study on the business for its sustained growth.