Damco shifts to river route for Bangladesh cargo

Damco shifts to river route for Bangladesh cargo

The Dhaka River Terminal is becoming a critical link in supply chains in Bangladesh.

Taking a cue from sister liner unit Safmarine, the Maersk Group’s freight forwarding arm Damco is using river transport to move freight to and from the port of Chittagong, Bangladesh’s main international maritime gateway.

Damco in a trade announcement said as part of its end-to-end freight forwarding service, exports goods are consolidated into full container loads in Dhaka and then barged down to Chittagong. This alternative mode of transport is helping to cut transportation costs and ease pressure on road networks between Dhaka and Chittagong, according to the statement.

“With Bangladesh being the second-largest exporter of ready-made garments in the world, this service would particularly benefit retailers in export-import trade,” Damco said. “The utilization of this new mode of transport has the potential to further enhance growth in the export-import trade of Bangladesh.”

Additionally, to mitigate equipment trade imbalance issues in the country, Damco is routing all imports through the Dhaka River Terminal, which includes the Pangaon Inland Container Terminal (PICT) and the SAPL River Terminal, from where empty containers are used for exports. The inland location has a combined capacity of over 200,000 TEU.

The company said its supply chain solutions are in line with the Bangladesh government’s river transport development program meant to tackle congestion caused by truck movements on the Dhaka-Chittagong highway.

“Most of the factories are present in Dhaka, whereas the Chittagong port handles more than 90 percent of Bangladesh’s export-import volumes. In the wake of double digit growth in containerized traffic, there is immense pressure on the road infrastructure between Dhaka and Chittagong,” Damco Area CEO Vishal Sharma told JOC.com.

Sharma said Damco remains committed to further improving its supply chain efficiency, and would continue to “innovate and introduce new products to service the trade in Bangladesh.”

Safmarine previously said it is using “river sea” category vessels to transport exports out of PICT rather than overland transportation fraught with long delays and heavy extra costs to shippers. Its river freight mode is reported to have a transit time of 48 hours from PICT to Chittagong.

The Danish group’s interest in coastal transport could prove a boon to short-sea ship operators looking to add feeder connections between India’s east coast cargo terminals and small ports in Bangladesh on the back of renewed “inland water transit and trade” cooperation between the two nations.

Chittagong’s throughput increased 16 percent year-over-year to 2.3 million TEU in 2016. Congestion and vessel backups consistently plague the port because of landside infrastructure constraints, limited yard space, and equipment shortages. Those issues worsen during Ramadan and the Eid al Fitr festivities that typically take place between June and September.