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December 10, 2023

Shippers losing interest in Ctg-Kolkata coastal route

With four ships, the Bangladeshi company Marine Trust Limited started shipping goods on the Chattogram–Kolkata route in 2017. However, the company has since stopped doing so.

A few other businesses, including Neepa Paribahan Ltd, the first ship operating business on this route, have imitated similar move, bringing the movement of commodities along this route all but to a complete stop.

Industry insiders have explained their withdrawal as being due to a variety of factors, including the Indian shipping authorities’ tight requirements for safety and security compliance aboard ships and short transit times.

Additionally, the companies claim that they have suspended their shipping services on the route since they did not increase freight fees in response to the 50% increase in fuel prices.

Businesses need to wait more than a month for transporting their goods on the route, despite only a 36-hour distance between Chattogram and Kolkata ports, owing to a shortage of ships.

In order to allow both Indian and Bangladeshi ships to transport cargo to recognised ports, Bangladesh and India signed a Coastal Shipping Agreement in 2015. After the deal was reached, direct container ship traffic between Chattogram port and Shyama Prasad Mookerjee Port Trust began.

However, businesses are now missing out on the advantages of this agreement since ship owners are now choosing another course despite having made huge investments in taka.

Initially, more than 10 ships from various firms would travel the route, but only two companies have continued to operate.

Businessmen predict there will be if this trend continues after 2022, no more shipping activities.

Therefore, they have asked that the Bangladeshi government address the issues at hand and boost th n umber of ships on this route. Shahikul Islam, managing director of Marine Trust Limited, told The Business Standard, “We have to face various difficulties. Even in securing permission to operate ships, we have suffered a lot. Now we have lost interest in operating vessels on this route due to various conditions imposed by the Indian shipping authorities.

The investment of Tk 80 crore would have been sufficient for local operations, he said, adding that the company is presently operating its four ships at inland ports.

Sharing a painful experience, he said that in March, an accident on board a ship dubbed Marine Trust 1 that would travel the Chattogram–Kolkata route cost the company Tk 12 crore in just recovery costs.

“Currently, Kolkata Port is seeking Tk34 crore in damages. That indicates that to get the ship back to Bangladesh and make it operational, it will cost us roughly Tk60 crore “he observed.

Less than Tk60 crore is the ship’s estimated current value. Additionally, six out of the fifteen seamen who were left stranded at Kolkata Port following the Accident have not been released yet, he added.

Neepa Paribahan Ltd started operating the first “Harbor 1” vessel on the route after the coastal agreement. The ship has operated 30 voyages on this route. Later, the company added another vessel named “MV Samuel” to its fleet. After the ship made five trips, the company stopped the operation of both vessels.

Nasir Ahmed Chowdhury Ripon, owner of Neepa Paribahan Limited and president of Bangladesh Container Ship Owners Association, told TBS that the Directorate General of Shipping, India, used to give permission for ships to ply this route for one year initially. But now it has come down to a month or less.

“So we have lost interest in it. Besides, the conditions given to ensure the safety and security of ships are difficult to maintain on ships plying coastal routes,” he also said.

Citing an example, Nasir Ahmed Chowdhury Ripon also said, “In the beginning, we used to spend about Tk4 lakh per month on salaries of sailors on this route. This expenditure has now increased to more than Tk 10 lakh because of a jump in grades of sailors and officers and an increase in their numbers on a ship to fulfil the conditions.”

Ship owners are not able to adjust to this additional cost, he added.

Ships bring in chemicals, iron goods, billets and yarns to Chattogram port and carry emply containers and agro-processed food items to Kolkata.

According to shipping firm Mango Line, the number of ships that have sailed this route since 2015 includes Ship Harbor 1, Marin Trust 1, Marin Trust 3, Trans Samudera, Nou Kollan 1, Nou Kollan 2, Shejyoti, and Invicta 1.

In accordance with a contract struck between India and Bangladesh to use Chattogram and Mongla ports for the transit of commodities, the trial run of cargo ships on this route is also almost complete.

Ocean-going ships must use transshipment ports, such as Colombo port in Sri Lanka, to transport goods to Kolkata. This process takes about two weeks and costs $600 per container.

On the other side, it takes 1.5 days for the products to arrive in Kolkata when travelling by ships that operate within the coastal agreement. The cost is less than $200.

According to the Coastal Shipping Agreement, goods can be transported to seven ports, including Kolkata and all river ports and three seaports in Bangladesh.

Ships with a capacity of 120–200 twenty-foot equivalent units (TEUs) of containers travel from Chattogram to Kolkata, according to Ayakub Bhuiya Sujan, managing director of MV Trans Samudera ship’s shipping agent Mango Line. Rent for an empty container ranges from $50 to $80 while the cost for one that is loaded with goods is $150 to $160. The cost of fuel has climbed by about P while the freight rates have remained constant over the past five years.

The Chattogram-Kolkata service should be maintained so that businessmen in both nations can benefit from it, according to Khairul Alam Sujan, vice president of the Bangladesh Freight Forwarders Association.

Md. Omar Farooq, the secretary of the Port Authority, stated that it is a matter of both nations’ policies. Therefore, he did not wish to comment.

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