The movement of direct container ships between Bangladesh to Europe will breathe in a new life to the container shipping industry in Bangladesh. The first ship on this route is all set to leave Chattogram for the Italian Port of Civitavecchia in the first week of February. In today’s blog, we will plunge into the details of the Chattogram-Europe container shipping route and how it will boost the sea freight shipping endeavours of Bangladesh.
Factors behind the creation of this new route
Previously, the MLOs (main line operators) didn’t take much initiative to create direct container shipping services from Bangladesh to Europe. This is because they were unsure if the ships will get enough cargo before commencing the journey. Additionally, the container shortage resulted in a 10 times increase in freight charges in some cases. The exporters were having a hard time making on-time deliveries amidst heightened freight costs.
Moreover, the congestion at the transshipment docks, berthing delays at Chattogram port, and the capacity crunch of the feeder vessels created a crisis situation. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) worked alongside Bangladesh Freight Forwarders Association (BFFA) to find a solution to the export issues. It is against this background that the Chattogram-Italy direct shipping service has been launched. We can expect many more ships to ply on this route in the coming months. The goods reaching Italy will be transported to other destination countries via road or feeder vessels.
A bit about the two ships
Kalypso Compagnia di Navigazione SPA Italy- an Italy-based shipping firm is currently operating two container vessels, the Cape Flores and the Songa Cheetah. Songa Cheetah is a Liberian flagship vessel that will reach Chattogram on 5th February 2022. The Cape Flores with a container capacity of 1200 TEUs measures154.47 meters by 25.19 meters.
Songa Cheetah left the Port of Ravenna, Italy on the 17th of January. The ships carrying 7 TEUs of apparel and raw materials and 945 TEUs of empty containers will reach Chattogram next week. During its return trip, it will carry over 16,500 tonnes of export items in 1,100 TEUs of containers. The ship will carry mostly garments the biggest export commodity in Bangladesh. It will also carry handicraft items that will be moved to several European cities after arrival at the Port of Ravenna. The Cape Flores already reached the Port of Chattogram in the last week of December with empty containers.
How the new route will give a boost to the container shipping industry in Bangladesh
More time effective for the shippers and traders
“The launch of this new route has opened new horizons in shipping between Bangladesh & Europe. It will reduce sailing time to 16 days saving 10-15 days of waiting at transshipment hubs for mother and feeder vessels. Besides, it will reduce the risk of surcharges that shipping lines sometimes apply due to congestion”, says Mr. Nurul Amin, the Managing Director of Tower Freight Logistics Ltd, Conqueror member in Dhaka, Bangladesh. Previously, the ships took as long as 40 days since they had to move via numerous transshipment ports.
To begin with, two vessels will move the export containers from Chattogram every 25 days. Chattogram Port is a feeder port. The launch of this direct route has finally met the long-time demands of traders, shippers, and forwarders. Moreover, this service will enormously increase the trade between Bangladesh and the countries in Europe.
The new route will reduce shipping costs by almost 40%
Most importantly, the entrepreneurs and port authorities expect this new route to lower the transportation cost by almost 40%. This new container shipping service has been launched at a time when shipping costs across all countries have almost tripled. The cost of shipping 20 feet containers from Chattogram to countries in Europe has reached somewhere between $8,000-$10,000. In a time like this, the launch of this new route will greatly benefit the shipping industry in Bangladesh.
To quote Syed Mohammad Arif, the Chairman of Bangladesh Shipping Agents Association, “Various charges have to be paid in different stages to send products to Europe. Direct transport of goods will save a huge amount of money. Foreign buyers will benefit as the cost of transporting goods will be reduced. This will play a big role in creating new buyers.”
The new shipping route will enormously help the garment export sector of Bangladesh
The garment sector is the backbone of the economy of Bangladesh. Presently, the ready-made garments sector accounts for almost 84% of the country’s exports. The readymade garments industry will be the biggest beneficiary of the new container shipping route. Bangladesh exports almost 60% of the manufactured garments to European countries. In fact, several products of some of the biggest fashion brands like H&M, Zara, Nike, Primarc, GAP Inc etc are manufactured in Bangladesh. The new shipping routes will ensure that the products quickly reach the foreign buyers in Europe.
Further plans for the container shipping industry in Bangladesh
The Chattogram-Italy route has opened a new phase of international trading for Bangladesh. Additionally, Chattogram Port has signed an MoU with the Ranong Port in Thailand. This will boost the trade relations between the two countries. Within a few months, work will commence for the building of the Patenga Container Terminal. This terminal with an area of 27.5 acres and a 600 meters long jetty will greatly boost the operations at the Chattogram Port. Additionally, they are planning to create the Bay Terminal- a green port just 6 Km away from Chittagong Port. This terminal which will be almost 4 times larger than the Chattogram Port will be operational by 2024.