Bangladesh has planned to conduct most of its shipping trade through the newly built deep sea port in Sri Lanka, aimed at cutting freight cost and making shipment to Europe quicker, officials said Thursday.
Shipping minister Shajahan Khan will fly to the Indian island nation next month to sign a new shipping service deal, which could usher in a new era in the country's 40 billion dollars plus foreign trade.
Presently, some 80 per cent of the country's foreign trade is done through Singapore port. Feeder vessels carry Bangladeshi containers to the port from where the cargoes board mother vessels to be shipped to their destinations.
But Sri Lanka's newly built Hambantota port could change the scenario, as it offers fewer days for shipment and a cheaper freight --- thanks to its proximity to Chittagong port and the country's major export market, Europe.
Shipping ministry officials said feeder vessels from Chittagong port take four days to reach Colombo or Hambantota while it needs five days to reach Singapore, home to one of the world's largest seaports.
They said after inking the agreement with Sri Lanka, the government would prod local shipping agents and their principal companies to make maximum use of Sri Lankan ports including the old Colombo port.
"We have estimated that increased use of Sri Lankan ports would save local exporters and importers hundreds of millions of dollars in freight cost. It will also save them at least one day in shipment time," said an official.
Shipping minister Khan confirmed to the FE that he was heading to Sri Lanka in June to sign a new shipping deal, replacing the one signed in 1979. The deal will make Bangladeshi shipment cost-effective, he said.
The deal was supposed to be signed during Sri Lankan President Mahinda Rajapaksa's four-day visit to Bangladesh last month. But it was postponed at the last moment due to procedural delays.
The issue of increased use of Sri Lankan ports also featured in the meeting between president Rajapaksa and prime minister Sheikh Hasina.
Shipping agents welcomed the planned deal with Sri Lanka, but they expressed guarded optimism whether the agreement could massively reorient Bangladeshi shipping trade via Hambantota and Colombo.
"It is true that Singapore port is costly and takes more time to reach. By contrast, Sri Lankan ports are cheaper and take one day less to reach," said ex-president of Bangladesh Shipping Agents Association Ahsanul Huq Chowdhury.
"But the main advantage of Singapore port is that it is very efficient. It is well connected and thousands of mother vessels are available there. That's why the shipping agents prefer the port," he added.
"If Hambantota and Colombo offer similar facilities, I am sure most Bangladeshi shipping agents would start using Lankan ports. After all, one day is a big factor as far as shipment and freight cost are concerned," he said.
Already some shipping lines have increased use of the Sri Lankan ports following the launching of the Chinese built Hambantota deep sea port on November 18, 2010.
General Manager of Maersk Bangladesh Ashish Jamal Haque said nearly 55 per cent of their cargoes now go to Sri Lankan ports and the rest to Singapore to catch main line vessels.
Mr Haque said mother vessels leaving Singapore need an additional four days to reach Europe than those which set off from Sri Lankan ports.
European nations accounted for some 60 per cent of Bangladesh's $16.2 billion export last year.
"Sri Lankan ports have one big problem: only a few mother vessels anchor there. If the number of mother vessels rises, more Bangladeshi feeder vessels will prefer Sri Lankan ports than Singapore," he said.
Maersk Line, one of the world's largest shipping companies, has nearly 33 per cent stake of Colombo port and majority stake of Tanjung Pelepas port in Malaysia. It carries up to 25 per cent sea cargoes worldwide.
Chittagong port's terminal manager Enamul Karim told the FE that some 80 to 85 per cent per cent of Bangladeshi export cargo goes to Singapore port.
Nearly 10 per cent goes to Colombo and five per cent to Tanjung Pelepas port in Malaysia, Lam Chabang Port in Thailand and Calcutta port in India.
He said of the 56 feeder vessels run by 10 feeder operators from Chittagong port, five to six go to Colombo but around 40 vessels go to Singapore. Most of the feeder vessels are being operated by the foreign companies.
In 2010 some 1.343 million TEUs (twenty feet equivalent units) export and import cargoes were handled by Chittagong port, up from 1.148 million TEUs in 2009
Shipping minister Shajahan Khan will fly to the Indian island nation next month to sign a new shipping service deal, which could usher in a new era in the country's 40 billion dollars plus foreign trade.
Presently, some 80 per cent of the country's foreign trade is done through Singapore port. Feeder vessels carry Bangladeshi containers to the port from where the cargoes board mother vessels to be shipped to their destinations.
But Sri Lanka's newly built Hambantota port could change the scenario, as it offers fewer days for shipment and a cheaper freight --- thanks to its proximity to Chittagong port and the country's major export market, Europe.
Shipping ministry officials said feeder vessels from Chittagong port take four days to reach Colombo or Hambantota while it needs five days to reach Singapore, home to one of the world's largest seaports.
They said after inking the agreement with Sri Lanka, the government would prod local shipping agents and their principal companies to make maximum use of Sri Lankan ports including the old Colombo port.
"We have estimated that increased use of Sri Lankan ports would save local exporters and importers hundreds of millions of dollars in freight cost. It will also save them at least one day in shipment time," said an official.
Shipping minister Khan confirmed to the FE that he was heading to Sri Lanka in June to sign a new shipping deal, replacing the one signed in 1979. The deal will make Bangladeshi shipment cost-effective, he said.
The deal was supposed to be signed during Sri Lankan President Mahinda Rajapaksa's four-day visit to Bangladesh last month. But it was postponed at the last moment due to procedural delays.
The issue of increased use of Sri Lankan ports also featured in the meeting between president Rajapaksa and prime minister Sheikh Hasina.
Shipping agents welcomed the planned deal with Sri Lanka, but they expressed guarded optimism whether the agreement could massively reorient Bangladeshi shipping trade via Hambantota and Colombo.
"It is true that Singapore port is costly and takes more time to reach. By contrast, Sri Lankan ports are cheaper and take one day less to reach," said ex-president of Bangladesh Shipping Agents Association Ahsanul Huq Chowdhury.
"But the main advantage of Singapore port is that it is very efficient. It is well connected and thousands of mother vessels are available there. That's why the shipping agents prefer the port," he added.
"If Hambantota and Colombo offer similar facilities, I am sure most Bangladeshi shipping agents would start using Lankan ports. After all, one day is a big factor as far as shipment and freight cost are concerned," he said.
Already some shipping lines have increased use of the Sri Lankan ports following the launching of the Chinese built Hambantota deep sea port on November 18, 2010.
General Manager of Maersk Bangladesh Ashish Jamal Haque said nearly 55 per cent of their cargoes now go to Sri Lankan ports and the rest to Singapore to catch main line vessels.
Mr Haque said mother vessels leaving Singapore need an additional four days to reach Europe than those which set off from Sri Lankan ports.
European nations accounted for some 60 per cent of Bangladesh's $16.2 billion export last year.
"Sri Lankan ports have one big problem: only a few mother vessels anchor there. If the number of mother vessels rises, more Bangladeshi feeder vessels will prefer Sri Lankan ports than Singapore," he said.
Maersk Line, one of the world's largest shipping companies, has nearly 33 per cent stake of Colombo port and majority stake of Tanjung Pelepas port in Malaysia. It carries up to 25 per cent sea cargoes worldwide.
Chittagong port's terminal manager Enamul Karim told the FE that some 80 to 85 per cent per cent of Bangladeshi export cargo goes to Singapore port.
Nearly 10 per cent goes to Colombo and five per cent to Tanjung Pelepas port in Malaysia, Lam Chabang Port in Thailand and Calcutta port in India.
He said of the 56 feeder vessels run by 10 feeder operators from Chittagong port, five to six go to Colombo but around 40 vessels go to Singapore. Most of the feeder vessels are being operated by the foreign companies.
In 2010 some 1.343 million TEUs (twenty feet equivalent units) export and import cargoes were handled by Chittagong port, up from 1.148 million TEUs in 2009