As Bangladesh Names Interim Leader, Cargo Movement Is at a Standstill
Port backlogs in Bangladesh remain problematic in the wake of nationwide violent protests and a sudden regime change.
A day after the ongoing turmoil forced Prime Minister Sheikh Hasina to resign and flee the country and led to the dissolution of the country’s parliament, President Mohammed Shahabuddin appointed Muhammad Yunus to lead an interim government in Hasina’s place.
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In selecting Yunus, a Nobel Peace Prize winner in 2006, Shahabuddin aims to restore order in a country that has endured mass unrest which has led to a reported 440 deaths.
The disruptions have severely hampered trade in and out of Bangladesh, halting the movement of rail cargo to and from the Chattogram Port. Although rail transportation of goods resumed on Aug 1., it was halted again just three days later on Sunday, resulting in a steady increase in the number of containers at the port.
Chattogram’s port yard has a container storage capacity of 53,518 20-foot equivalent units (TEUs). But while there are normally between 30,000 and 32,000 TEUs of containers in the yard at a time, there were 44,117 TEUs in the yard, according to a report from Bangladeshi publication The Business Standard.
“Continued backlogs and delays will mean shippers will face additional storage costs for waiting containers and could lead to more rate increases, with some carriers already announcing mid-month increases,” said Judah Levine, head of research at Freightos.
According to port officials, from 8 a.m. on Monday to 8 a.m. Tuesday, only 329 TEUs were delivered from the port yard. Of these, shippers took in 125 TEUs, while the remaining 204 TEUs were sent to private container handling companies.
The Bangladesh Inland Container Depots, which handle 93 percent of the country’s export goods, have seen about a 40 percent decrease in the receipt of export goods compared to normal days, alongside a decline in deliveries from the country’s key seaport.
“Container delivery operations at the port have once again come to a standstill over the past few days,” Liakat Ali, port affairs secretary of the Chittagong C&F Agents Association, told The Business Standard. “As vehicular movement on the Dhaka-Chattogram highway has almost come to a halt, most importers have not released their goods as of Tuesday.”
While the Chattogram port is open, businesses and logistics and transportation businesses have reportedly not wanted to move cargo due to security concerns since there is no traffic police presence on the highway.
According to the Bangladesh Covered Van-Truck-Prime Mover Goods Transport Owners Association, roughly 10,000 vehicles typically move in and out daily from various ports in the country. Of these, approximately 6,000 vehicles transport goods from Chattogram each day.
However, this number has now dropped to below 1,000 vehicles on average.
Security concerns have extended to customs assessment activities at the Chattogram Customs House, the report said. The customs house suspended activity Tuesday.
As a result, Ali said the Chittagong C&F Agents Association was unable to submit bills of entry for imports and bills of export for exports—further tying up goods at the ports and preventing their release.
Chattogram Port, also known as Chittagong Port, had been shuttered for six days in late July, further exacerbating the congestion of trucks and vessels in the area as the protests engulfed the area.
Berthing delays continue to take shape outside Chattogram, where more than 60 ships are queued up in a 25-nautical mile stretch, according to data from Vesselfinder. These delays are the worst in the world for any major port, according to container shipping consultancy Linerlytica, with many ships forced to wait in the Bay of Bengal for more than a week.
Supply chain visibility technology provider Beacon said ships stopping at the Chittagong Port see an average of 5.2-days combined anchor and berth times as of July 24, more than three weeks after the student protests began. Beacon’s data said Chittagong is tied with China’s Ningbo-Zhoushan for the second-most port congestion worldwide, after South Africa’s Port of Durban at a 7.2-day average.
But compared to the month prior, Chittagong ports saw these times extended by 1.1 days, while Durban’s congestion was relieved by 2.6 days on average. Ningbo-Zhoushan saw congestion averages cut down by 1.3 days.
According to Freightos Terminal data, the congestion has resulted in a significant rise in export ocean container rates.
“Rates to the U.S. are now over 40 percent higher than two months ago, reaching about $8,650 per 40-foot container,” Levine said. “Rates from Chittagong to Rotterdam have increased nearly 170 percent to approximately $7,000 per container.”
The standstill of goods has impacted trade at another major gateway, the land port of Benapole, which connects Bangladesh with India. Benapole is where 78 percent of Indian exports enter Bangladesh, according to the Asian Development Bank.
In the wake of Hasina’s resignation and departure, no goods have been exported from India to Bangladesh since Monday morning, nor have any trucks entered Bangladesh from India or vice versa. Cargo handling at the port has also been suspended.
Approximately 2,000 trucks were stranded at Benapole as of Tuesday. On average, 400 to 450 trucks import goods and 200 to 250 trucks export goods through the port daily.
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