Cargo shipping plummet on Ctg-Pangaon route due to high costs, customs issues

The Pangaon Inland Container Terminal by the Buriganga River in Keraniganj, initially established to ease the transport of containers from Chattogram Port via inland waterways, has seen a sharp decline in cargo movement.

Importers cite customs challenges, high freight rates, and a significant accident as primary reasons for the reduced activity on this route.

Initially, the Chattogram-Pangaon route operated regularly; however, by late 2023, ship movements slowed significantly.

According to shipping companies, freight rates for a 20-foot container range from $200 to $250—an amount importers argue is uncompetitive compared to rail and road transport.

The sinking of the Pangaon Express, owned by Chattogram Port and operated by Sea Glory, on 6 July 2023 further deterred cargo flow, with importers increasingly shifting to rail and road.

Chattogram Port data reveals that 147 ships operated on the Chattogram-Pangaon route in 2023, yet only 16 ships used the route from January to October 2024.

While 15 to 25 ships moved along this route monthly from January to August 2023, the frequency declined to only 1 to 4 ships per month from September, with no ships using the route at all in February this year.

Shipping companies, particularly Sea Glory, which operates eight ships on the route, attribute the drop in activity less to the Pangaon Express sinking and more to alleged "harassment by customs officials at Pangaon Customs House."

Zahir Uddin Jewel, managing director of Sea Glory, told TBS, "Container shipments on this route are deterred due to customs-related issues, not vessel incidents."

He also highlighted the logistical challenges of transporting heavy containers, which can weigh up to 30 tonnes, by road, causing many importers to rely on rail.

Maersk Line, a major player on the Chattogram-Pangaon route, has similarly seen a dramatic reduction in volume. Once moving up to 400 twenty-foot equivalent units (TEUs) of containers per month, Maersk now handles only 30 TEUs on the route.

A senior Maersk official in Chattogram, wishing to remain anonymous, told TBS that this is due to harassment at Pangaon Customs and clearance delays. Concerns about liability for cargo loss have also made importers hesitant, despite reassurances from the Chattogram Port Authority.

To address these issues, Chattogram Port Authority held a stakeholder meeting on 31 October, led by Chairman Rear Admiral SM Moniruzzaman. 

He assured participants that customs and tariff-related complications would be resolved quickly to improve route viability.

Mohammad Omar Faruk, secretary of Chittagong Port Authority, reported that steps had been taken to cancel a Ministry of Shipping notification issued in 2022, which had raised freight rates for the Chattogram-Pangaon route.

Faruk said, "Reverting this increase will make waterway transport more competitive."

Syed Mohammad Arif, chairman of the Bangladesh Shipping Agents' Association, told TBS that while shipping agents work at Kamalapur ICD under a reference licence, they cannot do so at Pangaon ICT due to customs complexities.

"The port authority has assured resolution on this matter, which will support smoother operations," he said.

If the freight rates were opened to negotiation, importers and shipping companies could reach favourable terms, according to Arif.

Pangaon Customs House Commissioner Shawkat Ali Sadi, who assumed his role only recently, acknowledged ongoing efforts to address complaints of harassment and cargo clearance delays.

"We aim to provide timely services while ensuring adherence to legal frameworks," he said.

Sadi noted that lowering freight costs and establishing a fixed schedule for vessel operations would provide certainty for businesses relying on the route.

Meanwhile, the Chittagong Port Authority remains committed to addressing tariff and customs issues to reinvigorate container handling at Pangaon ICT.