The waterway for transporting import-export containers from Chattogram Port to the interior of the country has not gained popularity. Primarily, the higher cost compared to the railway discourages businesses from using this eco-friendly route. As a result, much of the capacity of the Pangaon Inland Container Terminal, near Dhaka in Keraniganj, remains underutilized. Consequently, the original objective of reducing highway traffic congestion through this project has not been met.
Seventy percent of containers imported through Chattogram Port are destined for Dhaka and surrounding areas, with most transported via the Dhaka-Chattogram highway. One reason for the limited use of the Pangaon Inland Container Terminal under Chattogram Port is a Ministry of Shipping directive issued in 2022 that set fixed freight rates. Chattogram Port Authority has requested the ministry to withdraw this directive.
The port argues that the fixed freight rate on the waterway is much higher than the railway, thus failing to attract businesses. For instance, the cost of transporting a container to Pangaon by water is sometimes double or triple the cost of railway transport to Kamalapur Inland Container Depot. This has impacted the terminal’s revenue. Additionally, delays in clearing imported goods due to customs complications, along with the fact that shipping agents do not include Pangaon as a delivery point in their routing networks, contribute to the terminal’s underutilization.
The Pangaon Inland Container Terminal in Keraniganj, Dhaka, was jointly developed by Chattogram Port Authority and BIWTA to reduce highway traffic by transporting containers from Chattogram and Mongla ports via waterways. This project aimed to streamline import-export processes by reducing time and costs for Dhaka’s industries, promoting waterway container transport, and extending port facilities closer to importers and exporters.
According to Chattogram Port data, Pangaon Terminal has the capacity to handle over 100,000 containers annually. However, only 17 ships arrived at the terminal from January to October this year, handling 2,150 containers. In contrast, during the same period last year, 142 ships arrived, handling 28,444 containers. This indicates a 92 percent decline in container handling year over year.
Shipping agents often omit Pangaon ICT as a destination for goods delivery in their routing networks. They argue that setting fixed freight rates disrupts free-market competition, which aims to reduce costs by encouraging competition. They suggest removing the fixed rates for Pangaon ICT and letting market forces determine the cost.
Khairul Alam Suzan, Director of the Bangladesh Shipping Agents Association, told Bonik Barta, “If the directive on freight rates is canceled and an open-market approach is adopted, importers and exporters will be more interested in using waterways for container transport, thus achieving the terminal’s primary goal.”
It costs $1,200 to transport a container from Japan to Chattogram Port, while almost the same amount is required to transport a container from Chattogram to Pangaon.
Amin Hossain Noorani, a former director of FBCCI, suggests that even though waterway freight should be cheaper than the railway, the reality is different. To increase Pangaon ICT’s popularity, he proposes setting reasonable freight rates for the waterway and simplifying customs procedures.
Chattogram Port Secretary Omar Faruk told Bonik Barta, “To reduce highway congestion, container transport via waterways must be increased. The expected outcomes can be achieved if NBR’s customs department cooperates with the port authority’s initiatives. Port users also need to understand the project’s objectives.”
He added that the port authority has already written to the ministry requesting the withdrawal of the fixed freight rate directive.
According to NBR data, customs revenue from imported goods totaled BDT 6.21 trillion in FY 2023-24, with a significant portion spent on cotton imports. A 2015 government order required a certain percentage of raw cotton and machinery imported through Chattogram Port to be cleared at Pangaon ICD, although it has not been fully implemented. Textile industry stakeholders believe that expanding Pangaon Terminal usage can be achieved by permitting flexible routing for raw cotton.
Showkat Aziz Russell, President of Bangladesh Textile Mills Association (BTMA), said, “Pangaon Terminal has empty CFS space where cotton can be stored. Reforming customs policy and enabling international vendors to use warehouses would soon make the Chattogram-Pangaon route profitable and popular.”