By Naima Sultana
In a move already causing unease among businesses, the Chittagong Port Authority (CPA) is poised to implement a significant increase in port charges, the first comprehensive revision since 1986. While port officials argue that the adjustment is long overdue, exporters and importers fear it may deal a severe blow to Bangladesh’s already strained trade and manufacturing sectors.
The newly approved tariff proposal currently awaiting final clearance from the Ministry of Law encompasses more than 50 categories of port services, including container handling, tug assistance, berthing, pilotage, and even basic gate pass fees.
Some of these charges are set to rise by over 400 percent, with certain categories increasing by as much as 1,000 percent. CPA officials state the average increase will be around 60 percent.
However, for businesses already grappling with soaring freight charges, a sluggish global economy, and the looming threat of US trade tariffs, the central question is not whether the hike is overdue, but whether now is the appropriate time.
The Bangladesh Inland Container Depot Association (BICDA) has also announced an increase in handling fees. This, coupled with the CPA hike, threatens to undermine the competitive edge of the readymade garment (RMG) sector, the country’s largest export industry. Given its extreme sensitivity to cost variations, any escalation in logistics-related expenses could erode already narrow profit margins and diminish Bangladesh’s competitiveness against rivals such as Vietnam, India, and Cambodia.
Recently, Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), noted that profit margins in the RMG sector average around just 1 percent. In such a fragile environment, even marginal cost increases could push factories into loss.
“While the absolute increase in port charges may seem small in the context of total export value, the impact on individual businesses is tangible,” said Arif Khan, managing director of Khayer Fashion in Narayanganj.
“For each RMG product, raw materials are first imported and later the finished goods are exported, meaning the port charge is incurred twice. When you compare this against the sector’s razor-thin profitability, the impact becomes clear.”
Khan further added that the government should have considered increasing port charges only after improving port efficiency.
“If operational lead times were shortened, we could have offset the cost through quicker turnaround. Also, this hike could have been timed during a period of stability not when factories are already reeling from geopolitical tensions such as the looming US tariff shock,” he added.
A Hike Without Reform?
The port authority argues that operational costs have increased significantly over the decades, and the current tariff structure — unchanged for nearly 40 years — no longer aligns with service costs or global benchmarks. In 2020, the CPA engaged Spanish consultancy firm IDOM to review and update the tariff structure. The revised proposal was approved by the CPA board in December last year.
However, port users have questioned the rationale of raising charges without first improving service standards. Importers frequently face extended delays at the port, including berthing bottlenecks, slow unloading processes, and cumbersome bureaucratic procedures. Without service enhancements, a tariff hike simply translates to greater cost burdens for end users.
Critics also argue that Chattogram port lags far behind regional competitors in terms of operational efficiency, digitalisation, and turnaround time. In such a context, they contend that a tariff hike without tangible reform is both premature and unjustified.
This increase in port charges will inevitably raise freight costs, which are already elevated due to international conflicts and surging fuel prices. There are concerns that foreign shipping lines may follow suit and increase freight rates further, exacerbating the pressure on local exporters.
The RMG sector, which accounts for over 80 percent of Bangladesh’s total export earnings, is particularly exposed. Amid rising input costs, global demand volatility, and now steeper logistics fees, many exporters may be pushed into loss-making territory.
A Phased Approach Might Be Wiser
In the current economic climate, a phased implementation spread over six to twelve months and linked to concrete service improvements would have been more prudent. While rationalising port tariffs is essential for aligning with international standards, such reforms must be grounded in local realities.
Bangladesh is currently facing a series of overlapping challenges: external shocks, domestic economic slowdown, and rising inflation. An across-the-board tariff hike under these conditions could hinder trade, threaten jobs, and further strain an already burdened economy.
In fine, the issue is not whether the port charge revision is justified, but whether it is just and timely.
