Direct shipping
Conventional ones sceptical about long-term success
JASIM UDDIN HAROON |
Published:
May 01, 2022 08:52:07
| Updated:
May 01, 2022 18:56:37
The new business of direct shipping, which was introduced in December last, is expected to grab around 10 percent of the country’s export trade.
The established shipping lines, however, viewed that this new trend of the business would never be seen as a bellwether in facilitating the trade.
People at the local shipping companies said they may handle at least 10 percent or around 6,000 TEUs (20-foot equivalent units) of monthly shipment.
The Chattogram-based 18-inland container depots or off-docks handle around 60,000 TEUs a month.
Under the new trend of shipping business, consignments are supposed to reach destinations directly instead of transshipment ports, and mainly concentrate between Chattogram port and European ports.
Direct shipping was introduced following the high freight charges and other problems surfaced in the international shipping trade as the global economic activities started recovering from the coronavirus pandemic.
The freight rose to even five times higher and getting spaces on the container ships severely pinched. The volatility has intensified further due to the Ukraine war.
According to the United Nations Conference on Trade and Development (UNCTAD), the cost of freight has risen by 34 per cent since the Russian invasion of Ukraine on February 24 last.
Amid a chaotic situation prevailing in the shipping business, a new shipping service had been introduced to facilitate the shipment of export and import cargoes between Bangladesh and Europe by RIF Line, a leading forwarder, and its subsidiary Kalypso Compagnia Di Navigation SPA of Italy.
They have completed six voyages since its inception later in December last.
The service is set to launch another direct route from Chattogram to Barcelona of Spain and the Netherlands this May.
Another new service along the route of Chattogram-Rotterdam (The Netherlands) and Liverpool (England) may also begin soon. Three vessels, each having over 1500 TEUS capacity, will be deployed by Phoenix Shipping (local agent).
Aggregate, some eight vessels will operate on the direct Chattogram-Europe route, the biggest export destination of Bangladesh and mostly clothing products, from this May.
The total vessels that transport Bangladesh-made products through transshipment would be 80 plus. They reach Singapore and Colombo before loading onto mother vessels bound for Europe or America.
Captain Syed Sohel Hasnat, CEO at the Phoenix Shipping, told the FE: “We all may handle at least 10 percent of the monthly exports”.
He said the new business opportunity may grab even more market share once the international shipping business remains volatile.
Mr. Hasnat said they have confirmed marketing by adding the freight is much more realistic and competitive.
This new service will contribute hugely to the export trade, decrease the transit time, and will encourage more buyers from Europe, said Mr Rashed Ahmed, Bangladesh representative of the RIF line.
As the economic activities reopened after the covid-19 pandemic, the shipping lines have been charging exorbitantly high freight, creating an unbearable situation for the trade activities.
They said the buyers of clothing products and the importers were paying freight charges that had peaked at US$20,000 per TEUs on the back of a reduced capacity of the global shipping industry after the reopening of global economies.
The global shipping giants like Maersk Line, MSC, CMA, CGM etc. were charging such high freight, taking advantage of the reopening of the economies after the covid-19 pandemic.
Europe is the biggest destination for Bangladesh-made exports having around 55 per cent share of its total shipment.
A representative at a Singapore-based shipping line told the FE that these lines are operating mostly on an ad-hoc basis, and raised a question about how they will get containers.
“What they are presently handling is a very lower volume than the country’s exports of over 700,000 TEUs.”
