The National Board of Revenue (NBR) has formulated the country’s first-ever comprehensive policy for Private Inland Container Depots (ICDs) to facilitate their operations and expand Bangladesh’s foreign trade.
Owners of private DAIs welcomed the move, calling the policy comprehensive as it will help the sector get rid of the inconsistencies created by existing guidelines.
The Private Inland Container Depots (ICDs) and Container Freight Stations (CFSs) Policy 2021, which was released by the NBR last week, set out clear guidelines on the establishment of private DCIs.
The policy eliminated inconsistencies in existing rules, made it optional for ICDs to set up scanners and gave them the power to set rates themselves – changes that will attract investment to the sector.
At present, there are 19 private DAIs in Bangladesh, located in and around the port city.
More than 90% of the total goods destined for export are loaded into containers at DCIs before being shipped through the Port of Chattogram.
About 25% of the containers loaded for import are shipped from the port to the DCIs from where the goods are delivered to the importers after clearing customs procedures. Currently, 38 types of imported goods are delivered by DCIs.
Sometimes the port sends the incoming containers to the docks when they are empty after clearing the goods directly to the importers.
In 2021, 19 DCIs handled 7.09 lakh TEUs (twenty-foot equivalent units) of export containers, 3.03 lakh TEUs of import containers and about 13 lakh TEUs of empty containers, according to the Bangladesh Inland Container Depots Association. (BICDA).
The policy comes as companies demand the creation of more deposits based on the growing volume of the country’s foreign trade, which stood at more than $100 billion in the last fiscal year.
According to the policy, a proposed ICD must have a storage capacity of 4,500 TEU containers. It must have five years experience in handling export and import containers and cargo and be located on an area of at least 15 acres.
The NBR adopted the policy to address the issues encountered by ICD operators due to inconsistencies in the two separate guidelines, issued by the NBR in 1998 and by the Department of Shipping in 2016.
According to NBR guidelines, ICDs should be established within a radius of 20 kilometers around the port. But the Ministry of Shipping ordered that the ICDs be located more than 20 km from the port to reduce traffic congestion.
BICDA Secretary Md Ruhul Amin Sikder said that due to the differences in guidelines, they had frequently encountered problems as authorities had repeatedly ordered existing DAIs located near the port to relocate.
Under the new policy, proposed ICDs must be constructed at least 20 km from the port. It says nothing about existing CIMs.
“It shows that the new policy has a more practical approach for the sector,” Sikder said.
The ICD 2021 policy said nothing about tariffs, which also appears to be a positive approach for the sector, he said.
The 2016 directive from the Ministry of Transport stated that fares should be set by a committee of the ministry. Such a condition caused them a lot of hassle, according to Sikder.
The new policy also made it optional for ICDs to configure scanners. This was mandatory under previous directives.
However, he says operators with scanners would benefit from additional facilities such as the ability to handle a higher volume of imported goods.
“Such a facility will surely encourage deposit takers to invest,” Sikder said.
ICD users, however, were not satisfied.
Deputy Chairman of the Bangladesh Forwarders Association, Khairul Alam Sujan, said the NBR should have discussed with all stakeholders before formulating the policy.
“The new policy allows ICD operators to set tariffs as they see fit,” he said.
