Ships carrying RMG products get direct access to Europe
Moreover, vessels will also arrive at the Chittagong port with empty containers, resulting in a significant reduction of lead time
Pimple Barua, Saddam Hossain
Container ships with readymade garment (RMG) products are being allowed to directly enter Europe for the first time, a move entrepreneurs hope will greatly reduce transport costs and lead time.
According to apparel manufacturers, Europe is the largest destination of the country’s RMG products, with 60% of the total apparel exports.
But till now, there was no opportunity to ship RMG products directly to EU countries from Chittagong — the prime seaport of the country.
Generally, apparel items from Bangladesh ship to Europe through transshipment ports like Colombo, Port Kelang, or Singapore via feeder vessels.
From there, the goods are sent to Europe by mother vessels.
But now, cargo vessels with exporting goods will be able to sail directly from Chittagong port to Europe. Moreover, vessels will also arrive at the port with empty containers which will result in a significant reduction of lead time — one-thirds less than the previous time, according to some estimates.
According to the Chittagong Port Authority, the first ship is expected to depart on February 6.
Rear Admiral M Shahjahan, chairman of the Chittagong Port Authority, recently told Deutsche Welle (DW) that they have already completed the trial run for this.
According to the shipping agent, the first direct ship to Europe will sail for Ravenna Port of Italy from Chittagong port, and buyers from other European countries will receive their goods from there.
Italian shipping company Calypso Compania de Navigatsione-SPA’s two container vessels, Tsonga Cheetah and Cape Flores, will transport RMG items made by Bangladesh to Europe.
The Tsonga Cheetah is the flag bearer of Liberia and the Cape Flores is the flag bearer of the Marshall Islands, said the agent.
Mohammad Rashed, chairman of Reliance Shipping and Logistics, the agent of the Italian shipping company in Bangladesh, told Dhaka Tribune that the Tsonga Cheetah is expected to arrive at the Chittagong port on February 5 with empty containers.
“After the completion of all formalities, the ship will leave for Italy with 1,100 TEUs of export containers and reach Italy in just 16 days,” he added.
He also said that this will reduce the dependency on transshipment ports, foreign large mother vessels, and on large shipping companies.
“Three Italian garment buyers were in trouble due to high tariffs of container and shipping companies. Then they themselves took the initiative to launch this service on a trial basis,” he added.
He also said that if the initiative is successful, they, along with other foreign buyers, will come forward.
According to the agent, the Cape Flores ship arrived at Chittagong port on December 23 with 1,050 empty containers and then the ship left. Then the Tsonga Cheetah will arrive with 1,000 empty containers.
The Tsonga Cheetah is scheduled to leave for Italy with the containers left by Cape Flores, and then Cape Flores will ship the containers left by the Tsonga Cheetah, allowing the products to go to Europe from Chittagong twice a month.
According to industry insiders, the freight cost increased by more than 200% during the last two years.
The direct shipping is expected to bring relief to the manufacturers.
CPA Chairman Rear Admiral M Shahjahan told DW that it will open new possibilities for the RMG sector as it used to take at least 40 days to ship goods to Europe.
If the lead time is reduced to 16 days, the cost will be reduced by at least 40%, he added.
He also said that after this, the number of vessels to Europe will gradually increase and it will have a huge positive impact on the RMG industry.
Rakibul Islam, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said it used to take five to seven days to ship to transshipment ports like Colombo or Singapore. But then it takes 60-70 days for the goods to reach European ports.
“It will take 16 days through direct export and this will reduce the lead time significantly,” he added.
Due to the initiatives of Italian buyers, other EU buyers will also be interested to avoid congestion and it will be a great opportunity for Bangladesh, he added.
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