As shipping cos build warehouses in Ctg ICDs, exports to get faster, safer

Big shipping companies, freight forwarders and logistics entrepreneurs are teaming up with private inland container depots (ICDs) in Chattogram to develop warehouse facilities for faster and safer handling of export goods.

According to sector insiders, having warehouse facilities in depots will reduce the time for quality control of goods, as well as prevent theft or other probable damages.

Maersk, one of the world's largest shipping companies, has already constructed two warehouses on three lakh square feet of space at Chattogram's Ispahani Summit Alliance Terminal Limited (ISATL) and Vertex Off-Dock Logistic Services Ltd.

Another warehouse with 2.10 lakh square feet of space is being constructed at Summit Alliance Port Limited (SAPL). It will be opened in April next year. Once it becomes operational, Maersk will have about five lakh square feet of private warehouse facilities at three ICDs.

"We continue to invest and strengthen our commitment to Bangladesh with the expansion of our footprint in the country," said Vikash Agarwal, the managing director of Maersk South Asia in a statement issued recently. 

"We strongly believe in the potential of this country and its exporters, and we are fully committed to participating and playing a role in their respective growth stories," Vikash added.

According to the Summit Alliance Port Limited (SAPL) authorities, Ispahani Summit Alliance Terminal Limited has built a 2,00,000 sq ft warehouse for Maersk at their depot in the AK Khan area of Chattogram under a 5-year agreement. Besides, the construction of another two lakh sq ft warehouse at Summit Alliance Port Limited in the Patenga area began before last Ramadan.

In addition to shipping companies, a number of freight forwarder companies have started developing joint-venture storehouses in ICDs.

Earlier in 2016, Allport Cargo Services Ltd constructed a 70,000 square feet warehouse in Sitakunda in joint investment with private off-dock KDS Logistics Ltd.

Shimul Das, additional general manager of private off-dock KDS Logistics, told TBS, "Depot's warehouse has a niche for freight forwarders. But some companies are building warehouses with depot owners in joint ventures. Although our joint venture agreement with Allport Cargo Services ended in 2016, our business activities with the company are still ongoing."

Summit Alliance Port Limited (SAPL) has built a warehouse of about 250,000 square feet for several freight forwarders, including 130,000 square feet for Expr Freight in its depot at Patenga. 

Captain Kamrul Islam Majumdar, a senior officer of the SAPL, said, "Large companies are making joint investments in warehouses with Summit Alliance. We see this as positive for export trade."

Other container depots in Chattogram also have warehouse spaces allocated for various Main Line Operators (MLOs), and freight forwarders including Maersk.

Benefits of dedicated warehouses

According to exporters, freight forwarders and ICD owners, representatives of foreign importers visit the factories of exporters for quality control of products, which consumes a lot of time. If all products can be brought to the warehouses in ICDs, then the time now required for quality control can be greatly reduced. 

Syed Mohammed Tanvir, the managing director of Chattogram's largest apparel exporter Pacific Jeans and vice president of the Chittagong Chamber of Commerce and Industry, told The Business Standard, "This is undoubtedly a good initiative. If shipping companies have their own warehouse, service quality and professionalism will increase. The overall export process will be accelerated."

There are 19 private ICDs in Chattogram, which handle 100% containers of export products as well as 38 types of import products. They also store empty containers.

Khairul Alam Sujan, the vice president of the Bangladesh Freight Forwarders Association, said, "If the quality control process is carried out in a dedicated warehouse, it becomes easier to detect theft or damage in the products coming from the factory to the depot. This will reduce the time in the shipping process after production. The exporters of Bangladesh will benefit from this."

He also said several other freight forwarders have applied to the Customs Bond Commissionerate to get a license to set up a dedicated warehouse. 

According to the rules, all types of export products have to be stuffed into containers at the private depot of Chattogram before being loaded on the ships. Freight forwarder companies allocate dedicated space in depots for their organisation to bring goods from factories to depots. All depots have dedicated space for large freight forwarders and exporters.

Nurul Qayyum Khan, president of the Bangladesh Inland Container Depot Association, said, "The quality of service in the export product stuffing process will improve if global giant shipping companies develop their own warehouse system. We welcome this process."