Cyclone Remal: 68 ships at Ctg port face $4.62m demurrage after 60-hour closure

Cyclone Remal brought operations at Chattogram Port to a standstill for 60 hours, severely impacting cargo loading and unloading activities, including container deliveries.

The 60-hour downtime is expected to incur demurrage charges of at least $4.62 million for 68 ships that were loading or unloading cargo at the port's jetties and anchorage.

This disruption has also resulted in the stranding of approximately 5,000 twenty-foot equivalent unit (TEU) export cargo containers at 19 inland container depots (ICDs) at the port. Of these containers, 80% are filled with readymade garments shipments.

The delay has raised concerns about the timely delivery of export goods. Business leaders have expressed concern that these extra costs will ultimately be passed on to consumers, leading to higher product prices.

According to the Bangladesh Shipping Agents' Association (BSAA), the operation suspension has resulted in a total of approximately 2.4 million tonnes of goods delivery being delayed. These products include essential items, edible oil, raw materials for industries, and various other commodities.

BSAA Chairman Syed Mohammad Arif told TBS that the impact of the cyclone will undoubtedly have negative consequences for trade.

"The two-and-a-half-day suspension of cargo loading and unloading will lead to congestion of ships and containers. Importers will have to bear the additional port charges for the ships, which will negatively impact product prices in the market, leading to an increase in consumer prices," he said.

Cargo loading and unloading activities were suspended from Saturday night after the Met Office issued a Signal 9 warning for Chattogram Port. That night, 49 mother vessels that were unloading cargo at the anchorage were sent back to deep sea.

On Sunday morning, the port sent 19 ships that were at the port jetty to deep sea during the high tide.

Once the situation normalised somewhat, ships began to be berthed at the jetty on Tuesday (28 May) morning. Cargo unloading operations at the anchorage resumed after the mother vessels were brought back from deep sea.

It took about 3 days for cargo unloading operations to resume fully after the closure.

According to shipping agents, the daily charter charge for feeder vessels that unload cargo at the port jetty is around $20,000 per day. Due to the 60 hours of additional time spent by the 19 ships, the charterers of the ships will have to pay a total of $950,000 excess in rent.

The average rent for mother vessels with a cargo-carrying capacity of 60,000 to 70,000 tonnes at the anchorage is $30,000.

Due to the delay, a total of $3,675,000 additional rent will have to be paid for the 49 mother vessels at the anchorage.

In other words, the 68 ships will have to pay about $4.62 million in demurrage charges due to the cargo unloading suspension at the port jetty and anchorage. This additional cost will ultimately be reflected in the price of goods.

7,000 containers undelivered

The port's usual daily container delivery capacity is between 3,000 and 3,500 TEUs. As a result of the 60-hour closure, an estimated 7,000 TEU containers could not be delivered.

Importers noted that they are allowed to keep containers in the yard free of charge for four days after unloading from ships. After that, importers are required to pay various port and shipping dues within different deadlines.

Chittagong Port Authority (CPA) has stated that there is no provision for demurrage waiver if importers are unable to take delivery of containers due to adverse weather conditions.

Kazi Mahmud Imam Bilu, general secretary of Chattogram Custom C&F Agents Association, told TBS that they were unable to take delivery of goods from the port for two days due to the adverse weather. This has caused significant financial losses, which will ultimately be reflected in the prices of imported goods.

5,000 export containers not shipped

Meanwhile, depot owners said that at least 5,000 TEU export containers could not be shipped from the 19 private ICDs. Of these, approximately 80% are readymade garment shipments.

Authorities from Summit Group, owner of three container depots – OSCL, SAPL, and Isphani Summit Alliance Port – informed TBS that they could not send nearly 600 TEU export containers to the port in the last three days.

Bangladesh Inland Container Depots Association Director Captain Kamrul Islam Majumder told TBS that due to the port closure, container movement between depots and the port was suspended till Tuesday.

Bangladesh Garment Manufacturers and Exporters Association Vice President Rakibul Alam Chowdhury said that export goods are transported to Singapore, Colombo, and Port Klang ports by feeder vessels.

"From there, export goods are sent to Europe and America by connecting mother vessels. Due to the containers not reaching the transhipment port on time, there is uncertainty about the timely delivery of consignments to buyers," he said.

CPA Secretary Md Omar Faruk said that Container loading and unloading began after ships returned to the jetty at the port on Tuesday.

The port has a container storage capacity of 53,518 TEU. Currently, there are about 39,000 containers in the port yard. He assured that there is no fear of container congestion at the port.