Container shipping to Europe

Container shipping to Europe directly on February

New speed in export trade:

Traders say the initiative of Container shipping to Europe will strengthen Bangladesh’s position in a competitive market by reducing the cost of export-import trade, including the fixed operating costs of ships.

According to the concerned, Europe is the destination of 51% export of Bangladesh.

Therefore, if this route becomes popular, it will create a new milestone in the country’s export sector, they said, adding that it will attract new buyers and expand the country’s export sector.

Rear Admiral M Shahjahan, chairman of the Chittagong Port Authority (CPA), told The  that the experimental shipping on this route has already been successfully completed.

In April last year, about 25,000 Bangladeshi imported containers were stranded at transshipment ports in Sri Lanka and Malaysia. Production is stopped as the raw material of the industry does not reach the factory on time. Export goods could not reach the buyer in time. The traders had to face extreme financial losses. Later these containers had to be brought to Chittagong port by additional feeder ships.

Traders said that the import-export trade of Bangladesh is being affected due to the congestion in the transshipment port.

According to the Chittagong Port Authority, the country’s main seaport handled 15.25 lakh TEU export containers in 2021. Last December, it handled one lakh 30 thousand TEU export containers.

Port sources told that they did not have any statistics on how much of the goods were shipped to Europe or other continents after being unloaded at the transshipment port and sent to the original destination.

However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Shipping Agents Association say that 55 per cent of the country’s total export trade is with European countries.

Garment products account for about 82% of Bangladesh’s total exports.

Last year, an average of 1.27 lakh TEU export containers left the port of Chittagong for various destinations by ship every month, of which 56,200 TEU containers go to Europe alone.

BGMEA First Vice President Syed Nazrul Islam said, “Europe is the largest market for Bangladesh’s readymade garment industry. The new route Container shipping to Europe will be cut in half, which is very positive news for the country’s export sector.”

Syed Iqbal Ali Shimul, senior vice president of the Bangladesh Shipping Agents Association, said Europe currently accounts for about 51 per cent of Bangladesh’s exports. In addition, 25 percent go to America, 20 percent to Asia, 4 percent to Canada.

According to the relevant sources of the shipping lines, foreign buyers take goods from Bangladesh on free on board (FOB) basis, in which case the buyers carry the ship fare.

Currently, the fare for a 40-foot container ship from the transshipment port to Italy is between-10,000 and ৪ 14,000 depending on the shipping line. Concerned individuals say freight charges on the new route could be as high as ৭ 6,000.

92% of the country’s import-export trade is through Chittagong port. 98 percent of the container shipment is also here. However, when the ship failed to reach the port as per the schedule, the exporters were often forced to send the goods by air. This multiplies the cost of transportation.

Rakibul Alam Chowdhury, Vice-President, BGMEA, said, “Even if the goods are delayed for one day in the feeder vessel, there is a risk of missing the mother vessel. “In fact, new shipping lanes with Europe have created huge potential in the country’s export sector.”

Traders have advised authorities to create more routes for direct container shipping to other ports in Europe and America.

Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industry, said: “This is a great achievement for Bangladesh. Direct shipping with Europe will add a new dimension to the country’s export sector. Authorities must ensure that this service is not disrupted.”

Syed Mohammad Arif, Chairman, Bangladesh Shipping Agents Association, said: It will play a big role in creating new buyers. ”

 

Why the initiative was taken:

Main-line operators (MLOs) have not previously taken any steps to launch direct container services with Italy; This is because if such services are introduced, getting adequate cargo will be a big challenge. These main-line operators are carriers that operate ships on major trade routes.

Mohammad Rashed said, “In the Corona situation, the main lines are not delivering containers properly. Freight charges, especially in the field, have increased almost 10 times. Our principals are currently dealing with these issues. The Chittagong-Italy route has started direct shipping. Hopefully, other main line operators will also start shipping on this route. Then the freight charges will be further reduced. ”

Principal refers to the person or organization that owns / charters or manages the ship – represented by a company and / or carrier. Through this the services of the company are provided.

Referring to the road connections between most European countries, Rashed said: “Once the goods arrive in Italy, most of the goods will be delivered to their destination by road.

Large shipping lines are not yet interested:

Ajmer Hossain Chowdhury, assistant general manager of Mediterranean Shipping Company (MSc), told TBS: “We view the issue of direct shipping with Italy in a positive light. But it remains to be seen how successful it will be.

“There will be a specific shipping line to transport the goods, which is very small in quantity. Moreover, due to the shallowness of the port of Chittagong, it is not possible to load the mother vessel. Therefore, the goods have to be transported to Italy in small ships.

Large shipping lines are less interested in shipping goods to Italy. However, he said that once the Bay Terminal is completed, the shipping lines will come forward to transport goods directly to Europe.

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