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Shortage of lighter vessels at Chittagong port: Cost of imported goods increases by Tk1 per kg

  • Published at 01:42 am April 13th, 2018
Shortage of lighter vessels at Chittagong port: Cost of imported goods increases by Tk1 per kg
The cost of imported goods through the Chittagong port has increased by Tk1 per kilogram (kg) on average due to a shortage of lighter vessels, according to businesses. A lighter is a type of flat-bottomed barge used to transfer goods and passengers to and from moored ships. Although importers have paid money upfront for extra charges and demurrages to foreign shipping companies for delayed cargo unloading, consumers ultimately have to bear the costs of such additional payments, said the businesspeople. The dearth of lighters not only affects consumers’ pockets, but also creates major vessel congestion at the port. Such congestion is affecting the global image of the country’s prime seaport, said sources at the port. According to the sources, the mother vessels cannot directly enter the port jetties to unload large volumes of cargo due to the low draft at the outer anchorage area, which stands some 16 kilometers away from the jetties. Lighters are the only means to unload goods that arrive in bulk cargo. There are 39 river jetties across the country including Chittagong, Dhaka, and Narayanganj for unloading goods from lighters.

The shortage

According to port sources, earliar, products like wheat, coal, fertilizer, sugar, and mustard were imported. Recently, products like scraps, slat, stone, and rice have been added to the list. This has led to an increase in imports through bulk cargo vessels. The lighters are used to unload the goods from the bulk cargo vessels. According to the Water Transport Cell (WTC), a forum of the lighter owners who distribute lighters to importers for shifting goods from large vessels, 2,100 lighters have received licenses from the government, but there are only 1,450 lighters in operation at the Chittagong port. Businesspersons claim there is a need for 500 more lighters at the port to meet the ongoing crisis.
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They said, while imports through the port increased by 35% during the last two years, the shipping department imposed a ban on the construction of lighter ships from December 2015 to September 2017. This is one of the major reasons for the shortage of lighters. Meanwhile, the WTC sources blamed businesses for the crisis saying that the latter are responsible for the shortage as they delay the unloading of goods by using the lighters as floating godowns. Deputy Secretary for Operation of the WTC Ataul Kabir Talukder Ranju told the Dhaka Tribune: “The existing WTC lighters are able to carry three crore metric tonnes of goods every year, if the importers do not generate delays in unloading the goods from the vessels.” “There is a shortage of lighters because the importers use each lighter for about 45–50 days, whereas only 15 days is needed to unload the goods.” He said that some leading businesses have been using the waiting WTC lighter vessels as floating warehouses, as they (businesses) found it a less expensive means of storing goods. “If they store goods in the waiting vessel, they have to pay a demurrage of Tk12 to Tk15 per tonne per day for products like wheat, fertiliser, sugar, and other goods. They would have to pay three times that amount if they stored the goods at a warehouse on land.”

The losses

According to the importers and Chittagong businesses, there was a time when 50,000 tonnes of goods could be lightered in five days. Now it takes 60 to 70 days to lighter the same amount due to the crisis of vessels. When there was no crisis of lighter vessels, it was possible to transport up to 17,000 tonnes of goods per day. This is a faraway dream right now for the businesses, they said.
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According to the sources, importers hire foreign vessels in terms of unloading an average of 3,000 tonnes of goods from the mother vessels every day, but the vessels can actually only unload around 1,000 tonnes per day on average. Ahsanul Huq Chowdhury, President of Bangladesh Shipping Agents’ Association (BSAA), told the Dhaka Tribune: “The importers have to pay extra charges of $10,000 to $16,000 every day on average to the foreign ships for the vessels’ overstay.” Reportedly, goods were unloaded through lighter vessels from 1,327 large ships at the outer anchorage and port jetties in 2017, while goods from only 127 ships were unloaded according to the time stipulated by the foreign ship owners. On average, 1,300 tonnes of goods were unloaded daily from the 743 ships out of the remaining 1,200 ships, taking ten days more than the stipulated time due to the dearth of the lighter vessels. In the last year, importers had to incur losses of Tk1,200 crore. The price of imported goods increased by Tk1 per kg on average, said the President of Chittagong Chamber of Commerce and Industry (CCCI) Mahbubul Alam. He told the Dhaka Tribune: “Bangladesh’s imports have been growing as the country’s economy has been expanding immensely. More and more lighter vessels are needed to handle the imported goods through the Chittagong port. “The government should allow at least 500 more lighters to mitigate the ongoing shortage. Additionally, more jetties have to be built to speed up the unloading of goods from the lighters.” Chittagong Port Authority (CPA) Member for Administration and Planning Md Zafar Alam told the Dhaka Tribune: “Although we always pay attention to problems like container congestion, related to 30% to 38% of the cargo handling, the rest of the cargo is handled from the cargo vessels at outer anchorage through lighter vessels. “We are not related to lighter operation, but we look into any crisis that surfaces. Recently, there was a problem with unloading imported fertilizer. We found that 200 lighter vessels were floating at different places as the importers were using the lighters as floating godowns instead of unloading their goods.” He also said: “It is true that there is a shortage in number of lighterages. Moreover, the authorities that give the permission for building new lighters have cancelled the permission for more than one and a half years.” “In order to cope with the operational growth of the Chittagong port, the number of lighterages has to be increased. We have also taken some initiatives to increase the number of lighter jetties,” added Zafar.