Owing to the recent record price hike of fuel oil in the local market, Bangladeshi freight forwarders have enhanced forwarding charges by 57% for each import bill which the importers and apparel exporters have protested.
The freight forwarders argued that the charge, namely destination service charge, remained unchanged since 2014.
“During this long period, due to increase in the price of water, gas, electricity, gasoline, diesel, etc., the costs of running the business have increased several times, while the Delivery Order (D/O) fee of the freight forwarders has not been increased,” said Kabir Ahmed, president of Bangladesh Freight Forwarders Association (BAFFA).
In a recent letter to the association members, he also wrote that more recently, the unprecedented price hike of gasoline and diesel prices on 6 August 2022 has resulted in a significant increase in not only the cost of transportation but also the overall cost of doing business “leaving us with no option but to increase the D/O charges.”
Since 2013, BAFFA had been charging US$35 per import bill as a forwarding charge which now the association decided to raise to US$55.
In the fiscal year 2021-22, the port handled 1.65 million TEU of import containers out of its total handling of 3.25 million TEU which includes export and empty containers.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the main user of the port of Chittagong, which imports raw materials to prepare finished goods, strongly protested the rate hike by the BAFFA.
In separate letters to the Ministry of Shipping, chairman of the National Board of Revenue, chairman of the Chittagong Port Authority, Commissioner of the Chittagong Customs House, and BAFFA president Kabir Ahmed, the apparel makers have demanded to scrap the decision to raise charges.
The BGMEA said by arbitrarily realising US$35 against each import bill compared to US$20 fixed by the ministry of shipping, the BFFA members have overcharged the apparel exporters by US$189 million during the last eight years.
In addition, the apex apparel body in the letter said if the 57% forwarding charge hike remains in force the apparel makers will have to pay an additional US$55 million per annum.
“The forwarding charge hike comes as a fresh blow for the garment makers who are seeing a steep fall of work orders during the last couple of months,” noted Abul Kalam Azad, a Narayanganj-based apparel exporter.