After achieving a ground-breaking milestone of handling 10,000 containers in one day, Rear Admiral M Shahjahan, Chairman of Chittagong Port Authority shares his vision for the blue economy and how he plans on harnessing the enormous potential of the country’s ports.
You have an illustrious career. Previously you have headed the operations of Mongla Port and now our principal port. What according to you is the prospect of port led growth and how can it contribute to our economy?
Port and shipping are two important segments of maritime trade. The country’s maritime trade and commerce is principally based on Chittagong Port. Almost 98% of container cargo and 92% of the total trade of the country flows through the Chittagong Port. Other ports like Mongla Port, Payra Port, Land Ports and Airport, all encompass about 8%. From these statistics one can understand the importance of seaports. It is not just in Bangladesh, globally the maritime transportation is the cheapest and it handles a huge volume of cargo at one go.
For example, if you want to carry a cargo from Chittagong to Dhaka by land road, it takes US$350, at the same if you want to use the riverine road, from Chittagong to ICT Pangaon, it is only $100. The Chittagong Port has 3-dimensional linkage – river, land and railway. This port is not only providing service to the domestic cargo, but at the same time it is providing service to the regional countries, e.g., India, Nepal, Bhutan and in the future, it will be able to provide service to some extent to the landlocked Yunnan Province of China.
At the same time, we can also provide service to our eastern neighbour Myanmar. The Chittagong Port has huge prospects if we can develop a deep seaport. A deep seaport will allow Chittagong Port to provide service to all the regional ports like Mongla, Payra, Akyb, Yangon, Laem Cha Bang, Ranong, Phuket and in the western side Kolkata, Holdia, Vizag, and in the south Andaman and Nicobar.
Currently in the Chittagong Port, if a ship is coming from Singapore to Bangladesh carrying a maximum of 2,400 TEUs, the freight cost from Chattogram – Singapore will come up to US$1100- 1500. However, once the capacity of Chittagong Port is enhanced by constructing Bay Terminal, the freight will come down to half, enabling us to bring vessels having 12 m drafts with 4000-5000 TEUs of containers.
If Matarbari deep seaport terminal is in place and we have a deep seaport, then that port will be able to facilitate a vessel with a draft of 18 meters carrying 8000 TEUs of container cargo. It will bring down freight to almost one third. Thus, port economics can make a difference in developing the national economy, and at the same time it will also be able to shape the economics of this entire Indian subcontinent and Bay of Bengal region.
You were appointed during a difficult time, in the midst of a pandemic. How did you try to overcome the challenges you faced? Due to global trade slow down, CPA’s ranking was hampered globally. Tell us how we can rebound?
I was appointed as the Chairman of Mongla Port Authority on 8th April, towards the very beginning of the pandemic. The world has come to a halt with strict lockdowns in place. Due to our Prime Minister Sheikh Hasina and her able son; the Adviser to Hon’ble PM Sajeeb Wazed Joy’s brilliant initiative to digitize the country, we had a game changing asset readily available at our disposal. There were a few setbacks in getting accustomed but once we recognized the potential of digitization, we began utilizing it fully.
We began to carry out activities digitally and virtually. Our entire port system has a digital network. All over the country, we started doing our import-export, IGM, freight – everything – over digital means. Initially our people were slightly hesitant, but within a matter of just a few days they became acquainted with the efficiency of the digital system.
Global ranking on the ports of the world is decided arbitrarily through the number of TEUs handled at the port. Since there was a global shutdown and imports were slow to come to Bangladesh, similarly even exports from Bangladesh slowed down. This made buyers reluctant to send and receive cargo. However, the overall efficiency of the port has not gone down. The report we have this year is from 1 January 2020 to 31 December 2020 so it is not a recent statistic. The 2021 report will be available next year.
Normally in Chittagong Port, we handle around 270,000 – 285,000 TEUs in a month, but because of the pandemic, the cargo flow slowed down to 140,000 TEUs between April 2020 to June 2020. It has picked up again to 280,000 – 290,000 TEUs. This year, both our import and export has gone up and in the last seven to eight months the cargo flow has been good and encouraging. Now we stand at 2.1million TEUs so we are making up the loss. We are aiming to reach 3.2 million next year. So, we will be able to rebound and perform even better next year.
Importantly, last year our competitors like Vietnam and China who are also in RMG exporters were not affected as much as ours by the pandemic and their ports were open, and we shipped cargo from China to Bangladesh. But this time, it is the opposite with their ports shutdown and ours running at full capacity.
What are the other technical issues that we need to overcome? Can you elaborate on the kind of digitization that has been done in the Chittagong Port? What are the special measures you have taken to keep the country’s import and export uninterrupted?
In the Chittagong Port we have a Computerized Terminal Management System (CTMS). In some countries it is known as the Terminal Operating System (TOS) and in others it is known as Port Communicating System (PCS). Chittagong Port has been automated since 2011. Honourable Prime Minister Sheikh Hasina inaugurated the Chittagong Port Trade Facilitation Project and during that time I was Member (Harbour and Member) in Chittagong Port. Today we can exactly pinpoint where our container is, the number of containers, and the yard it is located in – all of it in real time.
Every year we are handling around 3 million TEUs, making it difficult to track individual containers manually. Our automated system has made the process easier. The container is discharged from the ship onto a container mover. The driver then inputs the name and location into the Hand-Held Terminal (HHT) computerized system, and takes it to the yard to stack it where he inputs the yard, stack and row numbers. The information goes to CTMS, informing the operator where the container is. After collecting the container, the operator inputs the new position of subsequent containers. This helps the system stay updated in real time.
As Chittagong Port Authority we have many responsibilities. We have to keep the economy moving. In international shipping there is a term called Common Carrier Agreement (CCA). Feeder vessels are coming to CPA and they used to normally bring their own cargos, they never used to share their surplus space or slot. For example, a ship has slots for 2.400 TEUs, but when she is leaving, she is loaded 1,000 TEUs of laden containers and another 500 TEUs of empty containers, and other slots remain unutilised, then she sails off to Singapore or Colombo, but she won’t share slots with others because there is competition among feeder operators. This type of competition is driven by the buyers on some occasions by making demands that certain vessels should carry their cargo. We ensured this time that the feeder vessels are signing CCA among themselves to share unused slots.
We also ensured that Main Line Operators are signing Direct Interchange (DI) of Containers among the MLOs to share each other’s unused empty containers to carry exports. Besides, we requested BGMEA to ask their foreign Buyers to keep the option open to carry export using available feeder operator, MLO and stuffing export goods in containers from Off Docks. We have asked feeder vessel operators to redirect some of their vessels to Chattogram-Colombo route from another route. Additionally, we permitted six new vessels to operate between Chattogram-Colombo route to expedite export. More so, we allowed Off Docks to store their empty containers in CPA’s yard to facilitate stuffing of goods in export containers at Off Docks.
We made an imperative that if anybody wants to come into Chittagong Port and wants to do business then he has to comply with the above mentioned measures and keep the above options open so that other people can use unused slots and containers. With our intervention the shipping company had to comply with above measures and now the system is functioning smoothly. In Chittagong Port, there is no congestion, no shortage of containers and yard space. Yard space of Chittagong Port is 49018 TEUs. With existing facilities, the port will be able to handle 4-5 million TEUs yearly and presently we are handling about 3 million TEUs plus.
Bangladesh has made headlines considering the huge maritime resources we have at the Bay of Bengal. How can we turn that potential into a reality? What’s your vision for that?
It is the responsibility of top decision makers to convert liabilities into assets, which is very important. Earlier our people used to say that our huge population is a liability. But look at it today, we have been successful in converting our population into human resource and now they are going outside for work and sending a huge volume of remittance which contributes a lion share in our economy.
In the Bay of Bengal, the primary perception was that the sea is blocking our country, but sea is the cheapest mode of transportation. Earlier we were preoccupied by land, but since then we have realized the potential in our seas. And this was done by the Father of Nation Bangabandhu Sheikh Mujibur Rahman when he enacted the Territorial Waters and Maritime Zones Act 1974 in April 1974 and on the other hand, Law of the Sea was enacted in 1982 much later. Bangabandhu Sheikh Mujibur Rahman has shown us the path and the potential that lies at sea. Our sea is full of living and non-living resources. Infrastructure, services, living and non-living are the 4 types of resources offered by the sea.
At present we are fishing and collecting minerals from the seawater, seabed and from the subsoil there of. We are also using the sea surface for transportation of maritime trade. The sea is a road to reach the outside world and conduct import and export of goods to the foreign country. If we would have a national flag container carrier commercial fleet both in the public and private sector; we could earn huge revenue in foreign currency which would be in the billions of US Dollars.
For instance, the Maersk Line belongs to Denmark, a country close to the North Pole where 9 months in a year they remain covered in ice. But they are the market leaders in the maritime sector for transportation of cargo. We had Bangladesh Shipping Corporation (BSC) since 1973 but we could not utilize that. If we could utilize it, then we could carry 50% of our import and export. As per the WTO’s International Code of Conduct for Liners Services for maritime cargo ratio is 40% of cargo for importers and 40% for the exporters and 20% by the rest of the world.
In our case, we are both the importer and exporter. Given the way the percentages are divided, we have the opportunity to take 50% share of the pie if we have our own merchant fleet, but we do not have a sufficient number of containers carrying vessels. Recently, the government has taken the initiative to develop our commercial fleet so that we can carry our own cargo. Considering our trade volume which is around US$90 billion, we have the potential to carry around 45%-50% trade volume and we can earn US$10-$12 billion as freight. The domestic rule is also in our favour because we have Flag Protection Regulation. It would have a significant impact on GDP.
Recently BGMEA made a request for the release of imported goods from CPA, instead of the same from Inland Container Depot (ICD). Do you think this will expedite the overall export import process? How are you going to respond to such pleas?
All over the world there is no port except Chittagong Port which is unstuffing the FCL container cargoes and giving delivery of those from the port yards. FCL container cargoes are coming to Chittagong Port and we are discharging it from ship, stacking in the yard, apprising, unstuffing and delivering it to the users. Chittagong Port is an ISPS compliant port. After 9/11, the international ports have come under this security compliance. Last year, the US Coast Guard was monitoring and doing the survey and reporting back to the US government to ensure cargos are going safely to the European and American market. Their observation was, not to unstuff and to deliver cargo from Chittagong Port yards.
If one visits the Chittagong Port on a busy day he will be greeted with a chaotic scene with cargo being unstuffed in every yard and hundreds of trucks and trailers going inside and loading. Every day Chittagong port handles more than 8,000 trucks, covered vans and trailers. If we can deliver cargo from Off Docks, it’ll be more efficient. Rete and numbers of handling will increase manyfold.
When cargo is discharged from the ship and it is in the container yard, we allow 4 days of free-time. But if they want to keep the cargo in the yard for a longer time than that and use Chittagong Port as a storage, we cannot afford to do that. The government has given licenses to the Off Docks/ ICDs, and most of the cargo for export is kept and stuffed from there.
Importers want the same provision but it is making the port congested bringing down port efficiency because the port yard is limited and it has to be used judiciously so we can provide better service to all stakeholders. Yet they can keep their FCL container cargoes in the port yard for four days free of cost and take delivery.
What is your vision for the Blue Economy cell of ministry of energy and minerals resources? How do you envision implementing them?
Port and shipping are two important sectors of the Blue Economy. Port is the staging hub for maritime trade and shipping encompasses maritime transportation between origin and destination. Last year our maritime trade volume was around $90billion, which is a very high prospect. If we can use this particular sector, we can significantly contribute to our economy. However, presently our participation is bare minimum. We can earn billions of dollars from the maritime sector as freight.
The other infrastructure we have is Inland Container Depo (ICD)/ Off Docks, Inland Container Terminal (ICT), Cold-chain Logistics Facilities and other sectors like railway, road and inland waterways– all are connected with the seaports.
If deep seaport can be implemented at the earliest, we can provide service to the entire region. Everyone – Nepal, Bhutan, India and Myanmar – are trying to utilize our resources. China is trying to make a corridor from Yunnan Province to Chittagong Port, and it is one of their points of interest in the Belt Road Initiative.
Presently, we are trying to introduce the feeder service in the Bay of Bengal region. For example, if Matarbari is turned into a deep seaport, then cargo will come from Mongla, Payra and Chittagong port and if we introduce a feeder service, this opens another scope of business, employment and investment. Ports of neighbouring countries may also use this port. If we can do this, the living standard and per capita income will go up.
This maritime sector alone can contribute 3%-4% to our GDP growth if the whole process can be streamlined and brought under one single ministry. Port and shipping, the two vital elements of maritime trade and being the nodal point of economic activity and cheapest means of transportation, play a game changing role in the national economy and contribute significantly to GDP. Lion share of foreign currency reserve earning is through port and shipping handling import and export. The effective use of port and shipping is of paramount importance for the overall economy. In fact, Blue Economy in general and Port and Shipping in particular can change the Fate of the Nation. It is like an Ocean of Opportunity.
How are you ensuring the wellbeing of the people working in the port?
Since the onset of the pandemic, we have taken extreme care of our people. Initially we requested non-operation staff not come to office, allowing only the officers and staff and labourers involved in port operations to come – this accounted for only 25% dedicated personnel who kept port operations running. We kept business, transportation and trade i.e., import and export uninterrupted. For the time being we only slowed down development work. We have provided all-out support to our staff. Government issued Health Guidelines and we ensured that those guidelines are strictly implemented. We have provided an adequate number of PPEs, masks, and hand sanitizers.
In all the gates we have ensured that people are entering, washing their hands and maintaining social distancing. We made sure the working areas are disinfected regularly, and we take care to disinfect all the vehicles entering the port as port gates are all fitted with disinfectant spray. We ensured port health services were activated for vessels coming from abroad and we did not allow any seamen to disembark onto the shore. If anyone was found infected with the Coronavirus, we kept the vessel in quarantine berths and provided treatment to that individual.
Chittagong Port has a well-founded hospital. We have established a COVID-19 unit in Chittagong Port Hospital and gave service to Chittagong Port personnel as well to locals. A lot of people have taken service from the port hospital free of cost. We have installed high-flow oxygen cannula. Recently we are installing an oxygen plant and ICU as well. We are self-sufficient in healthcare. In the port hospital we have also established COVID-19 vaccine centre – one for Chittagong port workers and two for local people. We requested the Ministry of Health through the Ministry of Shipping for allocation of vaccine to all types of port officials, laborers and stakeholders.
We have ensured 15,000 officials and laborers get the vaccine in the port hospital on a priority basis, because they are the Front Liners. So far, 53 port officials sacrificed their lives in the ongoing pandemic to keep the country’s lifeline running. And more than 2,500 were severely affected but thankfully they are cured. Chittagong Port’s motto is “the country moves with us”. We took the challenge to uphold the motto and keep the Philosophy of the Honourable Prime Minister ‘to strike a balance between life and livelihood’ in mind. We put our motto into practice and succeeded in keeping the maritime trade uninterrupted.