Ctg-Karachi direct shipment: Businesses eye trade boost with Pakistan

A new direct shipping route between Chattogram Port and Karachi Port in Pakistan has been met with enthusiasm from local businesses as they expect a trade boost between the two countries.

The service, launched by Dubai-based container shipping company Feeder Lines DMCC, has already completed two successful voyages, significantly reducing shipment time and costs for importers.

Earlier, goods from Karachi had to transit through various ports like Colombo, Singapore and Dubai, adding at least 20 days to the journey. The new direct route has slashed transit time to just 11 days, offering importers a more reliable and cost-effective option.

Khairul Alam Suzan, vice president of the Bangladesh Freight Forwarders Association, told TBS, "Earlier, there was no certainty about the delivery time of imported goods from Pakistan, as there were often delays at transshipment ports."

A Panama-flagged vessel, YUAN XIANG FA ZHAN, completed its second voyage to the Chattogram port yesterday, carrying over 825 TEUs (twenty-foot equivalent units) of cargo, more than double the amount of the first voyage.

The cargo included various commodities such as sugar, soda ash, denim fabric, yarn, dolomite lumps, natural dolomite, dried fish, UPS, potatoes and radiator cores.

Businesspeople say importers of industrial raw materials will now have the certainty of obtaining their goods within a set period. As a result, the volume of imports and exports with Pakistan is expected to increase further, they say.

Anis Uddin Dowla, executive director of Karnaphuli Limited, was optimistic about the future of the route. "The overwhelming response from businesses, as evident in the increased cargo volume on the second voyage, is encouraging," he said.

According to NBR data, Bangladesh's imports from Pakistan amounted to $74.4 million in fiscal year 2023-24. Of this, nearly 70% consists of raw materials for the ready-made garment industry and processed leather. Additionally, cement clinker, fruits and three-piece garments are imported. 

Bangladesh exported goods amounting to $62.6 million to Pakistan in FY24. The export items include jute, pharmaceuticals, hydrogen, tea and ready-made garments.

In the last fiscal year, the total quantity of imported goods from Pakistan was 1.6 million tonnes, of which less than 300,000 tonnes were containerised goods. In FY22, the value of imported goods from Pakistan amounted to $80 million.

Shafiqul Alam Jewel, vice chairman of the Bangladesh Shipping Agents Association, said direct shipping between Chattogram and Karachi has increased the volume of imported goods. At the same time, it will boost exports to Pakistan as well, he said. 

"This is very beneficial for our country's economy. However, it is essential to ensure that this service does not stop midway. Additionally, it is crucial to verify whether the declared goods for import align with what is actually being imported," Jewel said.

He further said the shorter the time required, the lower the cost of importing goods. "This is because reduced time will result in lower LC value, particularly reduced LC interest. Importers will be able to deliver products to buyers quickly and recover their investments faster. This will benefit both buyers and importers," Jewel explained.

Relaxation of physical inspections

Previously, even after goods arrived from Pakistan, various complications would arise during clearance. In particular, customs conducted physical inspections on all types of goods coming from Pakistan before clearance. 

"This not only extended the time required for goods to arrive but also discouraged importers from showing much interest in trading with Pakistan due to the hassles of clearance," said a port official.

However, after the fall of the Awami League regime, the interim government resolved the complications surrounding the clearance of imported goods from Pakistan. To facilitate trade between the two countries, the National Board of Revenue (NBR) withdrew the mandatory requirement for 100% physical examination of all imported goods from Pakistan.

"As a result of the lifting of this requirement, goods imported from Pakistan will now be inspected based on risk assessment, similar to goods imported from other countries," states an NBR information issued on 29 September.

Approximately one and a half months after the NBR's directive, the Panamanian-flagged ship arrived at Chattogram port on 11 November, carrying imported goods from Pakistan's Karachi port for the first time.