Blue economy, as the World Bank defines, is the sustainable use of marine resources for economic growth, improved livelihoods, and jobs while preserving the health of ocean ecosystem. It covers fishing, minerals, shipping and port infrastructure, biotechnology, renewable energy, tourism, ocean governance and education in marine areas. Blue economy plays significant role providing 30 per cent of oil and gas resources, 90 per cent of goods trade through oceans and seas. Blue economy contributes US$ 2.5 trillion to world economy employing around 60 million people in fisheries and aquaculture and providing rare earth metals like polymetallic nodules and sulphides.
Shipping and port facilities, is considered to be the backbone of the blue economy of Bangladesh, covers 80 per cent of the global trade by volume, and over 70 per cent by worth. By 2030, the projected freight value of Bangladesh is around US$ 435 billion. By enhancing the handling capacity of its ports and developing deep sea port equipped with modern handling equipment, Bangladesh can substantially increase earning a hefty amount of money as port duties.
However, the country needs to overcome different challenges such as improving port efficiency, maritime governance, and maritime legislation which is conducive to more favorable maritime trade. For e.g, Chittagong Port which handles the bulk of the maritime trade in Bangladesh has been ranked as the least efficient in container handling according to a new report by the World Bank and S&P Global Market Intelligence, primarily due to the time a ship/vessel spends at the port to complete is discharging operations (slow turnaround due to inadequate infrastructure).
Enhancement of the port's berthing capabilities is required to address this inefficiency, in order to increase its container handling capacity, reduce transport costs and turnaround times (the time required for loading and unloading of goods at the port).
Along these lines, Chattogram port has finally started accommodating large container vessels with 10 metres draught and 200 metres length, eight years after allowing 9.5-metre-draught and 190-metre-long ships to anchor at its jetty. Cargo ship Common Atlas, which had been docked at the port's outer anchorage after bringing in Meghna Group's 60,500 tonnes of raw sugar import from Brazil on 10 January, became the first large vessel to berth at Jetty 1 of the Chattogram Container Terminal. The enhanced vessel handling capacity of the country's premier port has paved the way for direct container ship services with various countries, especially the United Kingdom.
Besides, containers of imported goods can now be unloaded from large vessels at the port jetty instead of the outer anchorage, significantly reducing goods unloading and transportation costs as well as turnaround time. Bay Terminal is expected to go into operation in 2026 while the Matarbari deep seaport will be launched at the end of 2026, as per the latest intel from the Ministry of Shipping The Bay terminal will increase the handling capacity of Chattogram Port. There are no curves in the Bay Terminal Channel and due to proper navigability, it will be possible to berth ships with a maximum carrying capacity of 6,000 TEUs in 10-12 m drafts. Three terminals- a 1225-metre long container terminal (Container Terminal-1), a 830-metre long container terminal (Container Terminal-2) and a 1500-metre long multipurpose terminal- will be constructed under the project. According to the port authorities, vessels having only 9.5 metres draught and 195 metres length have been anchored at the port jetty since 2015. The 10-metre draught ships will be able to carry 3,500 TEUs containers to the port and bring down the overall cargo handling costs.
Besides, 95% work of PCT (Patenga container Termina)l has been completed, whose 600m long jetty will allow three large container ships to be berthed at once, and its 220m dolphin jetty can accommodate oil tankers. With modern handling equipment such as Quey Gantry Cranes (QGC) and Rubber-Tire Gantry Cranes (RTGC), the PCT is designed to handle 4, 45,000 TEU containers annually Bangladesh has moved down in the ease of doing business index, and one of the key reason is the poor maritime governance and the integrity challenges faced at the Ports by various parties, particularly the Shipowners and Ship Operators. Recently we have been facing a lot of incidents in which Ships have been detained for long periods due to contact with Port properties (for e.g Port jetty and terminal structures). The Ships were not allowed to leave the port until a full assessment of damages and settlement of the claims. Furthermore, the Ships were often arrested by the authorities requesting “unlimited undertaking” as security to get the vessel freed from arrest resulting in ships suffering huge financial losses in terms of additional hire, crew maintenance, port dues and agency fees due to the delay. The prolonged detention also risks consequential financial losses for Shipowners such as loss of future charters, and deterioration of the vessel and any cargo carried onboard or on containers.
There were also a few cases recently in which the concerned jetty/terminal was in already dilapidated condition and was unable to withstand the contact pressure of the vessel during berthing. However, the authorities detained the vessel and claimed damages for the new construction of the structures as opposed to claiming for the partial damages sustained to the structures. The authorities did not accept the Letter of Undertaking (LOU) provided by the Club as security and the Shipowners had to arrange Bank Guarantees as security to free the ships from detention which took at least seven working days to arrange. Many of these matters are still unresolved, facing litigation in the Admiralty Courts.
This issue became a major concern among Shipowners and Charterers calling in Bangladeshi ports and needs to be addressed by all leaders and stakeholders in the Maritime industry.
One way in which this issue can be eased is for our local stakeholders to accept the P&I Clubs Letter of Undertaking (LOU) as security. When claims fall within the P&I Cover, International Group Clubs can at their discretion, assist remarkably by quickly (within a day, if not a few hours) providing an LOU as security and getting the ships back in business. A club LOU is a written promise whereby the club agrees to promptly pay a final and unappealable judgment by a competent court, or if the club so agrees, a sum in settlement of the claim. The standard form of club LOU is an acceptable form of security in most jurisdictions. If required, it can be altered to fit local demands without losing their basic character and essential clauses retaining all defenses and the right of appeal as in a bank guarantee. In contrast, a bank guarantee takes several business days to arrange and most likely than not require an expiration date in the guarantee. Given the delay of arranging bank guarantees and the costs of bank fees and commission rates (around 2% per annum in Bangladesh), club LOUs result in substantial savings for the Shipowners/Members and minimising business disruption (smooth turnaround of ship/vessel). Another area, which needs to be addressed to reap the benefits of Shipping and Blue Economy, is the formulation of Maritime Legislation, which is business-friendly and promotes local Shipowners and encourages more local businesses and entrepreneurs to invest in shipping. The current size of Ships owned by Bangladeshis stands at 97 which is a record high. However this fleet size only supports 8% of the maritime trade (export-import) and we could save an at least 9bn US dollar in freight annually if we could increase our capacity and fleet size to carry our own cargo. Huge employment opportunities would be created as well.
Under the current maritime rules in Bangladeshi, a Bangladesh shipowner cannot sell his vessel 3 years before the date of purchase. The shipping industry is a very volatile market and these sorts of policies are deterring local entrepreneurs to invest in Shipping. Furthermore, due to complexities in obtaining finance from local financial institutions for purchasing ships due to stringent regulations of Bangladesh bank, many local investors have purchased and registered their ships in a different jurisdiction like Singapore for which we are losing out on foreign remittance.