• Friday, Jan 27, 2023
  • Last Update : 10:24 am

Global container crisis hits Bangladeshi exporters

  • Published at 12:28 pm July 6th, 2021
Chittagong Port
File photo shows a general view of the container yard of the Chittagong port Dhaka Tribune

According to Chittagong port officials, this has been partly brought on by the excess congestion in many Asian transshipment ports, meaning containers that took goods for export to foreign countries have yet to return for another shipment

Exports from Bangladesh have been facing unexpected delays for the last couple of months owing to the global container crisis. 

According to Chittagong port officials, this has been partly brought on by the excess congestion in many Asian transshipment ports, especially Singapore, Port Klang in Malaysia, and Colombo in Sri Lanka.

This means containers that took goods for export to foreign countries have yet to return for another shipment.

As a result, the inland container depots (ICDs) in Bangladesh are failing to transfer the products to the ports due to the acute shortage of containers. This problem has been amplified by delays in getting space on mother vessels in the transshipment ports, said port insiders.

ICD authorities said that there are no available bookings in the mother vessels for Europe and America from the three major transshipment ports due to the congestion of ships in the ports of those export destinations.

Also read - Exports on way to rebound backed by RMG recovery

The ships sailing for Europe are in the biggest crisis as major mainline operator (MLO) shipping companies are not taking bookings for the continent due to congestion in their own ports, they added.

Ruhul Amin Sikder, secretary of the Bangladesh Inland Container Depots Association (BICDA), said that the global shipping sector has been going through this problem since November last year as supply chains have been disrupted by the Covid-19 pandemic.

“There aren’t enough containers for loading goods, and also, not enough space in the mother vessels to ship containers to the export destinations,” he added.

Container exports to Europe and America from Asian countries increased from late last year, but the import of luxury goods from these countries has decreased due to the pandemic, he added.

“This has also reduced the rate of return of containers from Europe and America,” he added.

Moreover, congestion in many ports of these countries is resulting in more time for the containers to return. This has created the imbalance in cyclical activities of container transport, Sikder further said. 

According to the authorities, a total of 14,000 TEUs (Twenty-foot Equivalent Units) of export containers are lying in the ICDs against the capacity of 8,000 TEUs, leading to overcrowding. And the ICDs still face an additional shortage of 6,000 TEUs of empty containers for the goods that need to be exported.

The capacity of the 19 private off-dock containers in the port is about 77,700 TEUs. But the goods have already surpassed that capacity, disrupting regular activities.

Exporters usually keep their cargoes at ICDs, which are then kept at the container freight stations. Then freight forwarders book space for containers in feeder and mother vessels for the shipment and submit the cargo loading plan (CLP) to the ICDs.

Also read - How is transshipment working out for Bangladesh?

But now, export of the Bangladeshi garment products and other goods to the mother vessel in major transshipment ports has become uncertain as MLOs have stopped container bookings.

Dhaka Tribune spotted a long queue of trucks and covered vans carrying cargoes from the different parts of the country facing delays in unloading goods at the Chittagong port.

Moreover, the lack of feeder vessels is also evident.  

Earlier, feeder vessels loaded with 1,200 containers were available, but now, small feeders carrying 700-800 containers are not easily found, said port officials. 

Container and freight charges have also been increasing since last January, said port officials.

Khairul Alam Suzan, director of Port and Customs at Bangladesh Freight Forwarders Association, said that the crisis was caused by a major disruption to shipping schedules at some transshipment point for Covid-19.

“The schedule for mother vessels is not available. Where previously at least three mother vessel schedules were available, now there is only one,” he added.

The readymade garment (RMG) industry is suffering the most from this crisis as the largest part of the exporting containers are of apparel products.

Along with RMG products, other goods are also stuck in many consignments, leaving exporters worried about timely shipments and fearing order cancellations. 

Syed Nazul Islam, first vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Dhaka Tribune that the freighters cannot book space on mother vessels and there is also a shortage of proper containers. 

Also read - $51bn export target set for FY22

“Buyers are likely to ask for discounts if they cannot get the products to their stores on time. We have decided to inform this to our buyers’ forum. We have already started getting pressure from our foreign buyers,” he added.

He also said that hundreds of trucks are stuck and are unable to unload goods. Truck drivers are again taking demurrage charges from them per day.

“We are in talks with the relevant agencies on how to overcome the global crisis. This delay in shipping will have a long-term impact on Bangladesh's exports,” he also said. 

Meanwhile, a source from the Chittagong port has ensured that there are 26,336 empty containers lying idle at 19 private ICDs but just a few of these are capable of exporting goods.

The MLOs that mainly transport goods from Bangladesh are Hapag-Lloyd, Mediterranean Shipping Company (MSC), Hyundai Merchant Marine, CMA CGM, and Maersk Line, but the containers lying idle are those from other companies, like OOCL.

The officials of several shipping companies said that most of them are unwilling to give bookings for their containers due to an acute space shortage in the mother vessels at transshipment ports and the increase of freighter charges.

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