Auction backlog grows at Ctg port as 9,786 TEUs of goods decaying

Since 18 November, customs authorities in Chattogram have been destroying 5 lakh kg of decayed fruits and spices at the city corporation's garbage dumping yard.

These goods, valued at approximately Tk12 crore—including Tk4 crore for imports, customs duties, and other expenses—were imported by 11 businessmen and stored in 21 containers at Chattogram Port since 2023.

However, the importers never took delivery of the goods, and customs officials were unable to auction them in a timely manner. Low auction prices further discouraged sales.

This delay in auctioning goods has led to an increasing backlog of auctionable containers at the port. As of 20 November, there were 9,786 TEUs (twenty-foot equivalent units) of auction-eligible containers in the port yard, making up 32% of the total 30,841 TEUs of imported containers.

Data from Chattogram Port show that these containers were imported after 2004, and, based on information from importers and auction traders, the 9,786 auction-eligible containers contain over 2.15 lakh tonnes of goods. Traders estimate that these goods could be worth over Tk3,900 crore, with each container valued at an average of Tk40 lakh.

The number of auction-eligible containers has been rising since 2021, with 1,516 more containers eligible for auction in 2024 compared to the previous year.

Shafiqul Alam Jewel, vice chairman of the Bangladesh Shipping Agents Association, told TBS, "Unresolved auctions cause containers to remain stuck at the port for years, preventing their use for import and export activities. This results in financial losses for shipping companies, as they are unable to earn container rental fees."

"Although goods should be auctioned 30 days after importers fail to take delivery, the process often drags on for years, leading to substantial financial losses for shipping companies," he added.

Repeated auctions fail to sell goods

Chattogram Customs House has set a troubling record by putting up a single consignment of goods for auction more than 27 times.

This repeated auctioning not only increases auction-related costs but also leads to the deterioration of goods, making it impossible to sell them at reasonable prices. As a result, many products are ultimately destroyed at the dumping station, adding to the financial losses.

Auction traders have expressed frustration with the arbitrary decisions made by the customs auction committee, which they believe are preventing the sale of goods. This has led to a loss of interest from potential bidders.

One notable case involved a chemical shipment weighing 2,010kg, imported in 2007, which was put up for auction for the 27th time on 23 January 2022. Despite its original value of Tk3.31 lakh, the chemical deteriorated over the 15 years it remained unsold due to the prolonged and unresolved auction process, ultimately leading to its destruction.

KM Corporation, the private firm responsible for managing auctions for Chattogram Customs House, said that it earns just 0.11% of the revenue from the sales. The monthly costs for conducting these auctions—including advertising in newspapers, providing logistics support, paying staff salaries, and other expenses—exceed Tk3 lakh.

Customs sources said that if a bidder offers less than 60% of the reserve price set by customs, the goods cannot be approved for sale. Consequently, goods are repeatedly brought to auction until they fetch at least 60% of the reserve price.

Mohammad Yakub Chowdhury, general secretary of the Chattogram Customs Auction Traders Welfare Association, said, "The reserve prices set by customs are often too high in relation to the quality of the goods. This deters potential buyers, as they are purchasing these items for resale, not personal use. No one is willing to buy goods at a loss.

"As a result, despite repeated auctions, many goods remain unsold. And as they sit in storage, their condition worsens, further decreasing their value."

 Containers with hazardous chemicals raise safety concerns

The port currently stores 218 containers carrying hazardous chemicals, such as sulfuric acid and sodium and potassium hydroxides. Many of these containers, some as old as 15 to 20 years, have begun to corrode, leading to leaks and creating significant safety risks at the port.

In addition to these 218 containers, the Chittagong Port Authority recently auctioned and delivered four tank containers with highly flammable sodium nitrochloride. These containers, also over 15 years old, were sold on 27 October. Plans are also in place to destroy nine more containers of hazardous materials through Colombo Port in Sri Lanka.

At a press conference on 19 November, Rear Admiral SM Moniruzzaman, chairman of the Chittagong Port Authority, announced that efforts have been initiated to clear or destroy 9,000 old containers that have been at the port since 2004.

The port has made several attempts to speed up the auction process for uncleared vehicles, cargo and containers, and the issue has been raised with the chairman of the National Board of Revenue.

Customs scraps 121 undelivered vehicles

Customs has scrapped around 121 vehicles that were imported from various countries but never delivered due to complications. Some of these vehicles, which have been in storage for up to 40 years, have deteriorated over time.

The scrapped vehicles include microbuses, private cars, dumper trucks, mini pickups, toy cars, drum trucks, sweeper lorries, LPG carriers, AC buses, mini-covered vans, and Jeeps. Among them was a Mercedes-Benz.

After being dismantled, the vehicles are now piled in the customs auction yard to be sold by weight.

What customs says about unsold auction goods

Customs officials explained that, according to current regulations, if the bid price for a product in the first auction is less than 60% of the reserve price, the sale cannot be approved. In the second auction, the product can be sold if the bid exceeds the previous offer. In later auctions, the reserve price can be reduced gradually.

However, traders claim that bureaucratic issues created by customs officials delay the auction process. The auction committee, responsible for setting prices and making sale decisions, often does not lower prices enough, causing goods to repeatedly fail to attract buyers.

Saidul Islam, deputy commissioner of Chattogram Customs House, told TBS, "Customs is holding regular auctions, including online and spot auctions for perishable goods, to help clear the backlog. However, legal disputes often prevent goods from being cleared.

"Even when customs approves the sale, the plant quarantine station may not allow the release of goods if their quality has deteriorated."