BCSA warns of looming rail cargo congestion
DHAKA : Bangladesh’s Container Shipping Association (BCSA) gave warning of-an imbalance in railroad capacity in Bangladesh may pose a problem for cargo transportation throughout the country in the coming months as a current pileup could roll into Ramadan and Eid al-Fitr in March.
Ramadan typically results in a countrywide reduction in working hours that transpires until after Eid, which concludes on March 30.
According to a report, rail cargo movements could be halted for up to a week once Eid happens, as rail operators prioritize passenger services during the daylong religious holiday.
This could result in as many as 3,000 20-foot equivalent units (TEUs) of imports idling at Chattogram Port’s inland container depot by the end of April.
Fayyaz Khundker, Chair of Bangladesh’s Container Shipping Association (BCSA), said that on Monday there were already 1,287 TEUs of Dhaka-bound cargo at the container depot, which has a listed maximum capacity of 876 TEUs.
“Unless any proactive measures are taken immediately, a catastrophic situation may occur in the coming months,” said Khundker. “Only six to seven months ago, there was a backlog of 60 days for boxes destined for Dhaka from Chittagong by train.”
Bangladesh Railway is currently operating just one service a day due to ongoing shortages of boxcars, engines, and manpower. The Loadstar report says the operator would need to quadruple this if it is to clear the backlog or risk huge bottlenecks at both Chattogram and Dhaka.
According to a December estimate listed by the Indian business newspaper The Financial Express, the railway needs about 3,000 coaches and approximately 500 engines to run uninterrupted train service on all its routes. But currently, it has only 1,788 coaches and 295 operational engines.
On Wednesday, the BCSA expects to urge the railway and Chattogram Port Authority to take proactive measures as soon as possible.
The rail congestion concerns come just weeks after Bangladesh’s largest railway project officially opened its entire line to traffic. Conceived as part of China’s Belt and Road Initiative, the Padma Bridge Rail Link Project stretches 170 kilometers (105.6 miles) and reduces a railroad trip between Dhaka and southwestern city Jashore from an original 10 hours to just three hours.
According to Md. Fahimul Islam, secretary of the Ministry of Railways, the railroad would boost regional trade and social development by connecting southwestern Bangladesh to Dhaka. The project is anticipated to increase Bangladesh’s economic growth by 1.5 percent.
Bangladesh’s logistics sector already dealt with plenty of distractions throughout 2024 as political unrest pervaded throughout the country. Nationwide protests over the summer that resulted in the ouster of Prime Minister Sheikh Hasina also forced Chattogram Port to shutter for six days.
When the seaport closed, cargo congestion built up at its container yard, while ships in the area endured weeklong berthing delays. In the months after, the port and its surrounding infrastructure also dealt with more congestion due to a major flood in August, a software glitch in September and a truck driver strike in October.
The unrest also served as a backdrop for a shift in where American apparel companies were sourcing their garments.
Bangladesh’s garment exports to the U.S. fell by 0.46 percent to $6.7 billion between January and November last year, according to data from the U.S. Office of Textiles and Apparel (OTEXA). Neighboring India appeared to be a beneficiary of the decline, with its U.S.-bound apparel exports rising 4.25 percent to $4.4 billion in that same time frame.
The shift is a contributor to Vietnam’s recent surpassing of Bangladesh as the world’s second largest exporter of garments after China. In total, Vietnam was scheduled to generate $44 billion in apparel export revenue in 2024, surpassing Bangladesh’s target of $40.5 billion.
A Reuters report further suggested that Vietnam and India benefited from a shift in consumer preferences at the expense of Bangladesh. Shahidullah Azim, a Dhaka-based factory owner whose clients include North American and European retailers, told the publication some American buyers have shifted their orders to India and Vietnam.