Shipment company

Ctg’s direct routes to major ports cut shipping time and cost in half

October 05, 2022, 10:45 p.m.

Last modification: October 05, 2022, 10:51 p.m.

Infographic: TBS

“>

Infographic: TBS

It was once a “time of anxiety” for businesses and shippers at the Port of Chattogram who had shipments in or out.

As of April 2021, more than 25,000 imported containers were stuck at transshipment ports in Sri Lanka, Singapore and Malaysia, delaying or slowing down industries due to raw material shortages.

Exporters were powerless and increasingly fearful of not meeting shipping deadlines.

The crisis has been further complicated by soaring freight costs, while delays have disrupted global supply chains.

However, this scenario may soon be a thing of the past. Turning the crisis into a learning opportunity, the Chittagong Ports Authority (CPA) launched direct shipping services with seven of the 15 to 20 major routes from February 2022 to September 2022 with the help of local shipping companies and foreign.

Direct shipping from the Port of Chattogram has reduced shipping costs and time, while increasing port efficiency.

Infographic: TBS

“>
Infographic: TBS

Infographic: TBS

While previously it took at least 40-45 days to reach destination countries via transshipment ports, now it only takes 15-20 days. The cost of shipping has also dropped by 40%, according to insiders.

Importers can also expect to receive their goods faster.

The first direct shipment started in February 2022 on the Chattogram-Italy route. Currently, approximately 8-10% of products are transported directly to and from Chattogram to ports in Italy, France, Spain, the Netherlands, Turkey, China (Hong Kong) and the United Kingdom. United.

The CPA, which wants more routes, says direct delivery to Portugal, Slovenia, Thailand and the Middle East will begin by 2022, although a timetable has yet to be finalized.

CPA Secretary Md Omar Farooq said Indian coastal shipping is continuing, while a memorandum of understanding has been signed for the transport of goods to the port of Ranong, Thailand.

All government approvals have been obtained and direct shipping is also underway on this route.

He also said garment exporters are benefiting from the opening of direct routes to Europe. The delay was reduced and it was an important step for the economy of the country.

Port users say direct ships to Slovenia will be another milestone as it will facilitate the transport of goods to Germany and Portugal.

The Slovenian Port Authority held a meeting with the APC on this subject on 21 June.

Container services are connected from the port of Koper in Slovenia to Austria, Slovakia, Hungary, Poland, Italy, Germany, Croatia, Bosnia and Herzegovina and Serbia.

If the goods are sent from the port of Chattogram to the port of Koper, it will be possible to easily send goods to these countries, the Slovenian delegation said.

Shipping direct to this route will also reduce shipping time to Europe by 15-20 days.

Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have said that the market for Bangladeshi garments in the European market can grow by 55% to 80% using this sea route.

Meanwhile, direct shipping is expected to begin with UAE ports in November.

BGMEA Vice President Rakibul Alam Chowdhury said apparel exporters reap the most benefits from direct shipping to Europe.

The uncertainty of delivery to customers is no longer there, while the shipping time can be guaranteed.

He urged relevant parties, including garment exporters, shipping lines and freight forwarders, to ensure this continues.

Bangladesh Knitwear Manufacturers and Exporters Association director Shamsul Azam told The Business Standard that garment exporters to Europe have benefited greatly from the opening of direct routes from the port of Chattogram.

“Products now arrive half as fast and at a lower transport cost than before. This is very positive for garment exporters to Europe.”

He also said that the United States was a market for a large portion of Bangladeshi garment exporters, but there was no direct shipment on that route yet.

Mainline operators and shipping companies can check the feasibility of opening a new route from Chattogram to the United States via China, he suggested.

Meanwhile, Saif Powertec Limited is launching a new route from Chattogram port to UAE ports in November. There are three ships on this route.

An agreement to this effect was signed between Safeen Feeder, a subsidiary of the AD Port group, and Saif Maritime LLC, registered in Dubai, on September 25.

The 45 days currently required to move goods from Dubai to Chattogram will then be reduced to 18 days. In addition to the time, the cost of each 20ft container will decrease by $150-200.

Port of possibilities

Businessmen say the port of Chattogram will become the business hub of South Asia by connecting more efficient operators and bringing investment into the country.

Currently, vessels deeper than 9.5 meters cannot dock at the port. Accordingly, container transhipment from Chattogram Port in Colombo in Sri Lanka, Klang and Tanjung Pelepas Ports in Malaysia and the Port of Singapore is carried out by feeder vessels.

From there, the goods reach the destination countries via a mother ship to major ports like Rotterdam, Antwerp and Hamburg in Europe.

The process takes about 40 days.

Similarly, goods imported from different countries around the world are first cleared through customs at transshipment ports before being brought to Chattogram via a feeder vessel.

The depth of vessels transporting goods from the port of Chattogram to various ports in Europe is less than 9.5 meters. Although operators did not operate such vessels before, now they are more willing to do so.

Saif Maritime COO Abdullah Zaheer told TBS that about 64 feeder vessels from various shipping companies operate from Chattogram port to transshipment ports.

The President of Bangladesh Shipping Agents Association, Syed Mohammad Arif, said that while Bangladesh benefits from directing shipments to various ports in Europe and the UK, the reduction in waiting times also reduces uncertainties.

He said that on several occasions there was a long traffic jam at the transshipment port, disrupting supply chains and creating uncertainty in the delivery of products. Now these were disappearing as new routes were started.

However, mainline operators (MLOs) should launch more new launches, he suggested.

According to shipping industry officials, 40% of Bangladesh’s import and export goods are transported from Chattogram to Colombo Port. The remaining 60% pass through Singapore, Port Klang in Malaysia and Tanjung Pelepas.

According to the BGMEA, clothing represents 51% of exports to Europe, 25% to the United States, 20% to Asia, 4% to Canada.

The Port of Chattogram handles 92% of the country’s import-export trade as well as 98% of container shipments.

Of the total exports, about 82% are clothing products.

A new start

Once plagued by port congestion, Chattogram Port operations have become much smoother thanks to the initiatives of private operators and port authorities.

In fiscal year 2014-2015, a vessel was expected to spend 3.45 days at outer anchorage and at berth.

The waiting time at the outer anchorage has also decreased, 60-65% of ships were able to dock on arrival and the rest of the ships were able to dock within one day in the past six months.

CPA Secretary Md Omar Farooq said: “Now 60-65% have been moored on arrival and the rest have been moored within 24 hours over the past six months.”

The Port of Chattogram has seen significant growth over the past decade, handling 32 million TEUs in 2021.

The addition of a number of facilities, including four quayside gantries, to the existing ones has improved the port’s efficiency in container handling, significantly reducing vessel waiting and berthing times.

According to port data, 16 machines were added to the port in the three months starting May this year for container handling, including four quayside gantries, six rubber-tyred gantries, two mobile cranes with a capacity of 100 tons, two mobile cranes cranes with a capacity of 50 tons and two container ships.

Another 19 pieces of equipment are expected to arrive by December this year.

Dock cranes are the main equipment for loading and unloading containers to and from ships. With the addition of four new ones, the port now has 18 quayside gantries. And the number of gantries on tires is 49.

The port also has three terminals for cargo handling – General Cargo Berth (GCB), Chattogram Container Terminal (CCT) and New Mooring Container Terminal (NCT). The three terminals have 19 jetties, of which 13 are container jetties and six are for general cargo.

Chattogram’s NCT and CCT port are jointly managed by private terminal operator Saif Powertec. These two terminals handle container ships while the GCB handles container ships and bulk carriers. There are 12 berth operators operating this terminal.

In 2021, Chattogram Port handled 32.55 lakh TEU containers. Of this number, Saif Powertec alone managed 59% of the containers.

Deputy Chairman of the Bangladesh Forwarders Association, Khairul Alam Sujon, said local companies are proving their skills in managing the operational activities of Chattogram Port and collecting revenue.

The businessmen say the port of Chattogram will become the business hub of South Asia by connecting more efficient operators and investments in the country.