Charges and fees to rise by an average of 41pcCPA to enforce increased tariffs from 15 Oct

Highlights:

Tariff increase impacts 23 service categories

Overall port usage costs set to rise by an average of 41%

One of the most significant increase in charges will be in the container handling sector (37%)

Vessel waiting charges face a drastic increase, up to 900% for prolonged delays

 

The Chattogram Port Authority (CPA) has announced that it will enforce a new tariff structure from 15 October, which will see port usage charges and fees rise by an average of 41%.

The decision was formalised via a circular issued on Tuesday, signed by CPA's Chief Finance & Accounts Officer Mohammad Abdus Shakur. The new rates will apply to all ships, containers, and cargo arriving at the port.

The CPA confirmed the implementation after a one-month suspension prompted by intervention from Shipping Adviser Brigadier General (retd) M Sakhawat Hossain.

CPA Secretary Md Omar Faruk said, "The adviser had suspended the collection of increased tariffs for a month. It has now been decided that they will be collected from 15 October – after midnight past 14 October."

The decision has met with strong objections from business groups, who warn of a direct threat to the country's export competitiveness.

The CPA circular added that all listed shipping agents have been instructed to secure a no objection certificate (NOC) for incoming vessels only after ensuring that the required amount of funds, calculated at the new, higher rate, has been provisioned in their scheduled bank accounts.

This marks the first tariff increase by the Chittagong Port Authority in approximately 40 years.

The CPA, in accordance with a government gazette, had initially declared its intention to implement the increased tariffs across 23 service sectors from 15 September.

Out of 52 total service sectors at Chattogram Port, tariffs were increased in 23, following a review of operations and tariffs at 17 international ports, including 10 in Asia. Spanish firm Idom acted as the port's consultant in determining these new rates.

Businesses had raised strong objections, warning of the potential adverse impact on the export industry. These concerns were voiced during a workshop at Chattogram Port on 20 September, attended by Adviser Sakhawat. In response to the objections, the adviser decided to postpone the collection of the increased tariffs for one month.

Steep rise in key sectors

According to the gazette, one of the most significant increases in charges will be in the container handling sector. The fee for a 20-foot container will rise from Tk11,849 to Tk16,243, an average increase of 37% per container.

For container vessels, import container charges will increase by Tk5,720 and export container charges by Tk3,045. The loading and unloading fee per container has increased by approximately Tk3,000, and the charge per kilogram of containerised goods has increased by Tk0.47, from Tk1.28.

In addition to containers, general cargo is transported through the port. According to the authorities, if the proposed increased tariff is implemented, the tariff per kilogram for all types of goods will increase by an average of 14 paisa.

Currently, the tariff is 35 paisa per kilogram. That means the average tariff increase is 41%. Overall, container handling costs alone have seen an increase of 25% to 50%. Vessel waiting charges will also see a sharp rise, almost doubling in some cases.

If a ship cannot berth within its scheduled time, an additional charge of 100% will apply for waiting beyond 12 hours, 300% for 24 hours, 400% for 36 hours, and a substantial 900% for waiting longer than 36 hours.

Pilotage charges for vessels have been set at up to $800, and tug charges for each ship's assistance at up to $6,830.

Chattogram Port is a critical hub for Bangladesh's economy, handling 92% of the country's import-export sea trade and 98% of its container and cargo handling.

In 2024, the port handled 3.27 million TEUs (twenty-foot equivalent units) of containers, compared to 3.05 million TEUs in 2023 and 3.14 million TEUs in 2022.

Additionally, the port handles an average of 130 million tonnes of cargo and over 4,000 cargo vessels annually.

Earlier in June, the CPA had proposed the hike, prompting protests from trade bodies and shipping agents. At a meeting convened by the shipping ministry on 25 August, port users argued that any tariff adjustment should remain within 10%-15%.

However, the meeting ended without a decision amid stakeholder opposition. Another round of discussions was held on 5 September, but the final decision largely followed the port authority's proposal with no concessions.

The port currently collects tariffs under 52 service categories, 23 of which are directly affected by the new rates. Once implemented, the new structure would raise tariffs by an average of 41%. Because all charges are fixed in US dollars, taka depreciation would further increase costs, port users had said.

Business concerns

Mohammad Abdus Salam, managing director of Asian Group – a major ready-made garment producer, argued that the timing is poor.

"For us who are involved in imports and exports, the port is our associate. If we do business, the port gets freight charges. But if we don't do business, the port won't have business either," he said.

"I believe the port should not have raised the tariff at this time. The port is not running at a loss. This should be reconsidered to sustain Bangladesh's exports," he added.

Echoing similar concern, Md M Mohiuddin Chowdhury, managing director of Clifton Group, said the hike would affect the consumer.

"The port authority has raised the tariff without consulting any stakeholders. This will directly affect the ready-made garment sector. Our costs will increase, and so will the costs for our buyers. It is a suffocating situation…The tariff increase will also directly fall upon consumers inside the country," he said.

Tanjil Ahmed Ruhullah, director of the Bangladesh Shipping Agents Association, acknowledged the port's right to modernise its tariffs but criticised the implementation.

"The abrupt enforcement, without adequate transition time or detailed stakeholder consultation, risks disrupting trade predictability and undermining Bangladesh's competitiveness in regional shipping," he said, noting that the dollar-denominated contracts used by global carriers make sudden, mid-cycle cost escalations extremely difficult.

The association urged the authorities to consider a phased implementation approach to ensure a "fair, transparent, and sustainable tariff framework."