Recognising contribution of private ICDs to economy

Chittagong Port has very rightly been called heart of the national economy as it has been playing a pivotal role in the export-import trade of the country as well as in the national economy. In all considerations, justification and practicality it is really so. This prime seaport of the country is the principal gateway for the country's export-import trade.  If Chittagong Port is considered the 'heart of economy', the private Inland Container Depots (ICDs) or the Dry Ports, also called Off-docks, are to be termed principal nodes of arteries and veins to that heart without which the heart would stop pumping or functioning.
If we care to take a glimpse of the statistics of Chittagong Port over the last decade or more, we would find that in 2003 total volume of containers handled by Chittagong Port was 624,560 TEUs and in 2015 it came to 2,024,207. It means the volume more than tripled in a span of 12 years, marking an overall growth of 224%. Chittagong Port Authority (CPA) ostentatiously celebrated touching the milestone of handling 2.0 million TEUs in 2015 although it was supposedly marked to do so in 2016. The growth in container traffic through Chittagong Port has been astronomically considerable and it will remain so or even more in the coming years, and it goes without saying that it is a very strong indicator of national economic growth which will obviously contribute to gross domestic product (GDP) of the country.
Now, against the backdrop that there has hardly been any remarkable expansion in Chittagong Port in the last decade, the question that inevitably comes to the fore is how Chittagong Port has been coping with this huge container traffic growth over the years. The simple reply should be private inland container depots (ICDs) or off-docks relentless working twenty-four, seven round the year.
It is the private ICDs that have worked in strong coordination with Chittagong Port and kept this heart of economy beating in a rhythmic, healthy and sustainable way. The handling of about 92% of exports, including 100% of readymade garments (RMG), that used to take place in Chittagong Port even up to the end of the twentieth century is now being done by the Private ICDs and these export goods include all sorts of exportable RMG products worth USD 26 billion as well as other goods like jute and jute products, leather, tea, vegetable, beverage, handy crafts, bamboo, fabrics, broken plastic, ceramic, scrap, sugar, chemicals, building material, ship spare parts etc. Apart from this, private ICDs handle 26% of the total containerized imported goods that come through Chittagong Port.  The last but not the least, these ICDs store a huge volume of empty containers which is collectively almost ten times the volume usually stored by Chittagong Port. And this huge storage of empty containers plays a very significant role in keeping the export-import trade running.
In 2003, Chittagong Port handled 659 container vessels while in 2015 this number rose to 2566, marking a growth of 289%. Turn-around time of container vessels in this period decreased from 7/8 days to 3 days clearly indicating faster and improved operational activities. Given the involvement of the ICDs in the operational activities of Chittagong Port as its associates, their contribution to the port's dynamism is undeniably laudable and more importantly indispensable. In spite of all the hurdles that are there in Port-ICDs operation, one must reconcile with the fact that the overall port-operational activities have undergone remarkable improvement given the colossal growth in business and export-import trade in the last decade, especially in last eight years.
Considering its inception towards the end of the nineteen eighties, the ICD sector is still being considered a relatively new port-related service industry and this might be one reason why majority of the ICD-users such as exporters, importers, shipping agents, clearing and forwarding agents, mainline operators and freight forwarders are not sufficiently aware of the detailed operational modalities of the private ICDs as well as their full-fledged contribution to shipping industry and national economy. Even the concerned government wings are not adequately familiar with the contribution that the ICDs are making to trade and economy.  Nonetheless, the fact still remains that the indispensability of the private ICDs has been growing with time. It is undeniable that the advent of ICD sector has not only added a new dimension to the ever-growing shipping industry but has also elevated the prime seaport of the country to a new operational level and enabled the export and import trade of the country to grow unhindered thus far.
Let us look at the beginning of ICD sector. When containerization in shipping started getting introduced at the beginning of the eighties of twentieth century, i.e. in 1981, Chittagong Port had no other alternative but to get adapted to the newly introduced process of the global supply chain management which encouraged the exporters and importers all over the world to transport their cargoes in containers across the international borders in sea. At that very crucial juncture Chittagong Port Authority (CPA) deemed it necessary to request the local entrepreneurs to come forward and invest in setting up private Inland Container Depot (ICD). The businessmen at that time were barely familiar with the very new idea of ICD and they were not interested to make foray into some venture that they had very little concept about. However, in the middle of nineteen eighties some bold and dynamic entrepreneurs took the initiative to set up the pioneering ICDs of the country. Gradually one or two ICDs started coming into being.
At present there are 18 ICDs/off-docks operating with the licence of Chittagong Customs House. These have been set up in a collective area of approximately 260 acres of land with collective cargo freight station (CFS) area of approximately 24 lac square feet to store and handle export goods and about 4 lac square feet of warehouse area to deliver containerized import goods. On average the ICDs are now collectively dispatching about 45,000 TEUs of loaded export container to Chittagong Port for shipment, delivering about 22,000 TEUs of loaded import containers from their yards in a month besides storing about 45,000 TEUs of empty containers at any given point of time. A glance at comparative statistics of Chittagong Port and the ICDs can show the sheer significance of the ICDs' operational activities:
Very few people know about the operational modalities and huge daily activities of the private ICDs. The ICDs have agreements or contracts with the main-line operators (MLOs) or their local agents called shipping agents and under those agreements/contracts the ICDs store their empty containers at their yards, transport them to or from Chittagong Port, exchange them with other ICDs and receive them from consignees or importers after delivery of import goods. In short, ICDs handle all empty containers under contractual binding with MLOs or shipping agents as per government regulatory bodies' rules and regulations.
When it comes to handling export cargoes, the ICDs provide service both to freight forwarders and exporters themselves. The exporters send their exports to foreign buyers through freight forwards (FFs) and FFs take all logistical supports from the ICDs. Generally the exporters send their export consignments on their own arrangement to the CFS of the Off-docks, and once the cargoes are received by the Off-docks the responsibility lies with them to perform all operational activities, from getting the goods containerized under customs supervision to dispatching the loaded export containers to Chittagong Port or getting the containers loaded onto designated vessel/ship.
An export container can only be dispatched to Port to get boarded on the designated vessel/ship after getting the release order/out-pass from the on-duly customs officials at individual off-dock.
There is a customs station or cell in every ICD, which comprises a Deputy Commissioner or an Assistant Commissioner of Chittagong Customs House and a group of Revenue Officers (RO) and Assistant Revenue Officers (ARO). All the customs formalities pertaining to export and delivery of any containerized goods under 37 items allowed for ICDs are being done by this designated cell of Chittagong Customs House. This customs team in every Off-dock deals with all the customs procedures, including assessment, appraisement, payment of duty/tax/excise etc related to all export and import goods. The ICDs have no role to play here but to provide all the logistic and operational support. All activities of ICDs are wholly controlled by customs officials. Import assessment and duty collection, if any, is done at the Customs House of Chittagong.
The first ICD policy in a much brief form was first promulgated back in 1998 when this present government party was in power. It really helped and guided this new industry to blossom. It is again in the incumbency of the present government that a detailed policy for the private inland container depots (ICDs) titled Private ICD/CFS Policy 2016 has been drafted and approved.
It is our general understanding that when the government makes a policy regarding a particular sector or industry, that sector or industry gets to receive special priority which helps it to flourish for the betterment of the national economic growth. It was a long-cherished desire of all the owners of the ICDs that a detailed ICD policy would be adopted by the government which will enable the ICDs to thrive and provide them with better opportunity to explore new avenues  whereby they will contribute more to export-import trade of the country.
It should essentially be mentioned here that although the ICD/CFS Policy 2016 is expected to shape the ICD sector in better ways, there are certain sections in this policy which need to be reviewed from practical perspectives. One should keep it in mind that Bangladesh as a developing country still lacks in infrastructural facilities and there are hardly sufficient exclusive diversified roads, highways or expressways that are required to move the ICDs' inbound and outbound cargos to and from Chittagong Port which is handling more than 2.0 million TEUs a year. Nevertheless, the fact remains the existing ICDs have been serving the nations with a lot of limitations which only can be removed by the government.
Another important aspect is that the operations of Chittagong Port and private ICDs are very closely interconnected and interdependent -- one affects the other very acutely. It is not possible to improve one without improving the other. ICDs dispatch export-loaded containers to yards of Chittagong Port or ships' hook-point and brings import loaded containers from yards of Chittagong Port to ICDs' yards. Operationally when Chittagong Port acts as receiver, the ICDs act as sender and vice versa. So the overall operation gets faster and smoother when both ends work efficiently. It is the general tendency of the ICD-users to find faults or shortcomings of the ICDs when they do not get their service at the expected satisfaction and they conveniently forget that it might not be the fault of one end but both ends and intermediary factors.
In 2015, Chittagong Port handled a little over 2.0 million TEUs but very few people even in the shipping arena know that out of that two million the ICDs collectively handled 1.624 million TEUs.
At present the ICDs are allowed to handle 37 items of containerized import goods which include wheat, rice, mustard, waste paper, chick-peas, lentils, raw cotton, animal feed, scrap, hard coke, carbon black, marble chips, ball clay, onion, ginger, garlic, fertiliser, soda ash, PVC resin, staple fiber, containerized square log, dates, sugar, bitumen, empty cans of beverage, marble stone, sodium sulphate, wood pulp, global salt, soybean meal/extraction, DDGS, rice bran, corn glutten meal, rap seed extraction, palm kemels, maize and soybean. The ICDs started handling import containers back in 2007 when only nine items were given to the ICDs. Gradually the number of items for the private ICDs has been increased in a bid to decongest Chittagong Port.
Presently the monthly volume of import-laden containers handled by all ICDs is about 22,000 TEUs per month whereas the ICDs have a collective capacity of handling about 35,000 TEUs a month. The ICDs have been appealing to the National Board of Revenue which has sole jurisdiction over this matter to release more import items to private ICDs. It is worth mentioning here that Chittagong Port is the only port in the world which still strips import-loaded containers inside its premises and gives delivery of the goods directly to importers whereas it should act only as a transition point wherein only ship-shore loading-discharging operation should take place. Experts on port and container terminals have opined that the one important way to get Chittagong Port more dynamic is to drive the import volume out to private ICDs for delivery.
The import containers that come to private ICDs get scanned by container scanners at port gates before their exit from Chittagong Port. At present there are four scanners at the port which were installed about eight years ago. They are all almost at the end of their technical lifetime. In past eight years the volume of import containers through Chittagong Port has more than doubled, but the number of scanners has remained the same and, consequently, due to excessive volume of import containers scanning points have become a cause of delay for the ICDs to take out import containers to their yards.
In the present circumstances there have been suggestions from certain quarters or business forums that container scanners should be set up in private ICDs for import containers to lessen the load of scanning inside Chittagong Port on the premise that ICDs-bound import containers will be scanned upon their arrival at ICDs. But those who are advocating this suggestion overlook the fact that if containers are not scanned before their exit from Chittagong Port, the whole purpose of scanning would go in vain simply because the ICDs are located at different locations at various distances from Chittagong Port and if containers are allowed to leave the port without getting scanned, contraband items or any sort of explosives or weapons or items used for terrorism may make inroads into the country and then get replaced on their way to the ICDs.
Therefore, there is no alternative to import containers getting scanned inside Chittagong Port if any illegal or extralegal, duty-evading or terrorist activities through import are to be prevented. Besides, setting up container scanners would involve a huge amount of investment which is unaffordable for majority of the ICDs, even for the biggest ones that have already been struggling with financial crisis with a huge amount of bank loans with high rate of interest.
ICD sector as a priority major back-up for national economic boost does not enjoy any sort of facilities in any ways, including tax, VAT, duty and bank interest rate, whereas in neighbouring countries the ICDs/CFS enjoy different sorts of government subsidies as a priority infrastructural service sector.
Recently there have been questions about the overall capacity of the ICD sector. As per the ICD/CFS Policy 2016, there are some benchmarks in relation to standard equipment and other logistical capacity of the private ICDs on the basis of their area and container handling. Contrary to the common belief of the ICD-users, almost all the ICDs have been found to possess equipment and logistics more than the policy-illustrated benchmarking.
Nonetheless, the ICDs are not being able to work up to the expectation of their users or clients. Why? There are other reasons and intermediary factors which the authorities concerned should explore themselves and find solutions thereto. The ICDs have always been ready to improve themselves to provide the best of their service to their clients and to survive the extreme competition in a free economy and they have to do it to find their own business viability.
But it is high time that Chittagong Port Authority started reviewing its own equipment and logistical capacities and saw whether they are on a par with the growing volume of container traffic. It should also find out the internal factors like simplifying and automating gate formalities, storage of container in more systematic ways, proper and error-free utilization of port operational software named Container Terminal Management System (CTMS), more coordination with customs activities, getting optimum output from the berth and terminal operators etc.
Besides, the roles of exporters and imports are also greatly involved with the fast mobility of this sector and bringing down the turn-around time of the vessels and average stay-time of an individual container.
Although the ICD sector in Bangladesh has been shouldering the responsibility of handling almost the total export volume of the country besides handling a quarter of the total containerized imports, the investors in this sector have still been struggling to make both ends meet as far as their business viability is concerned. The charges in ICDs in our country are still far lower than those in neighbouring countries like India, Sri Lanka, Singapore, Malaysia and other countries of South Asia. Even the charges at Chittagong Port are considerably higher for the same services and operational activities.
The investors in ICD sector have been facing odds like huge investment, high bank interest rates, colossal operating costs, huge development and maintenance costs at frequent intervals etc since the inception of this sector. A few ICDs have already wound up due to incurring loss, which is a very alarming signal for the whole sector. One must not forget that if this sector collapses for financial constraints, the consequences will be catastrophic for the export and import trade and the way to recovery will be next to impossible and the country's overall economy might face a big setback.
With the prudent and visionary guidance of the present government, Bangladesh has already been able to achieve millennium development goals (MDGs). Now we are all focused on reaching sustainable development goals (SDG) by elevating our GDP above seven. The way the country's economic growth has been advancing, it is very much possible. The ready-made garment sector is all set to attain their target of $50 billion at the 50th anniversary of Bangladesh's independence, i.e. by 2021. Undoubtedly two of the most important instruments to vision 2021 is Chittagong Port and the private ICDs. In order to nourish private ICDs, the government should extend all-out patronage towards this sector so that it can contribute the most to national and economical betterment towards achieving vision 2021 development goals.
ICDs owners sincerely think and feel that this dynamic government will do the needful so that the sector does not suffer and continues playing their role as per international standards on a par with the neighbouring countries.
The writer is the President of Bangladesh Inland Container Depots Association (BICDA) and Chairman of QNS Container Services Limited.
Email:  chairman@qnscont.com