Mohiuddin Abdul Kadir
The Chattogram Port Authority (CPA) issued a circular on 30 September 2025 to implement the ‘Tariff on Goods and Vessels etc. for Chattogram Port Authority 2025.’ Starting from midnight on 14 October, all vessel, container, and cargo bills are to be calculated based on the new tariff schedule.
Following the issuance of this circular, shipping lines initially imposed port cost recovery surcharges and emergency cost recovery surcharges. However, they had to withdraw these surcharges after the port threatened to cancel their licenses. This will force shipping lines to absorb the increased port costs for cargo that had already been booked, but they are expected to raise their freight rates to adjust to the new tariff.
The increase in costs will be passed on to local importers, ultimately impacting Bangladesh’s consumers and businesses. As most imports in Bangladesh have low elasticity of demand, the price hike will likely trigger a ripple effect, raising costs for exports as well.
Given that most of Bangladesh’s exports have high elasticity of demand, buyers may seek alternative sources, risking the loss of market share for local exporters. The ready-made garment industry, highly sensitive to cost fluctuations, is expected to be the worst affected.
The basis for the tariff increase by the Chattogram Port Authority remains unclear. The consultant, Logicforum, which conducted the research behind the new tariff structure in 2021, was registered in 2018 and lacks any prior experience in port consultancy or management, even according to its own object clause.
The consultant’s report does not specify the pricing model used to determine the tariff, rendering the tariff structure arbitrary and without a solid foundation. The circular dated 14 September also failed to disclose the rationale behind such a substantial and drastic increase in tariff.
Chattogram Port should have complied with Section 9 of the CPA Act 2022, which mandates the formation of a committee comprising its officials and stakeholders to determine an appropriate tariff rate.
There is no provision in law that allows the Chattogram Port Authority to appoint external consultants for determining tariff rates. Furthermore, CPA acted unlawfully by imposing the tariff less than a month after the gazette’s issuance, violating Section 33(5) of the Port Act, which requires a two-month notice before implementing any tariff increase after the publication of the gazette.
On 19 October 2025, the CPA issued a statement on the tariff for cargo handled at Chattogram Port. If anyone should take credit for the rise in import-export trade, container, and cargo movements, it should be the exporters, importers, stevedores, and laborers.
The port exists because of trade, and if the shipping community finds a cheaper and more efficient port, the port authority will lose its business and revenue. Therefore, the port authority should consider the opinions of stakeholders before making such significant decisions and acknowledge their role in making the port a viable entity.
In its statement, the port authority cited rising costs and the argument that the tariff had not been revised for four decades. However, the current tariff schedule was last revised in 2008, making the four-decade argument invalid. Despite this, Chattogram Port has remained profitable under the 2008 tariff rate, even though it has engaged in activities that were not authorized by law.
Neither the Ports Act 1908 nor the Chattogram Port Authority Ordinance 1976 grants CPA the authority to invest in inland feeder vessels at prices significantly higher than the market rate, nor does it authorize investment in the Payra port project. The Payra port investment, made without legal sanction, has proven to be a waste of public funds.
Nevertheless, the previous regime included a clause in the CPA Act 2022 that allows corrupt politicians to divert Chattogram Port funds for any reason, a clause that must be repealed by the interim government to prevent further misuse of public money.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) recommends using marginal pricing theory for ports, considering their public utility nature. According to this theory, users should only be charged the marginal social opportunity cost (MSOC) of the resources they use. If port charges exceed the MSOC, total port capacity will be sub-optimally utilized, encouraging foreign ships to divert to other, potentially more efficient and cheaper ports.
Chattogram Port and the new Matarbari Port, which the government aspires to turn into a regional hub, will face competition from ports like Mundra, JNPT, and Colombo. This competitive factor must be carefully considered when developing a pricing model and tariff structure for Chattogram Port.
Ports are essential to a nation’s logistics infrastructure and play a pivotal role in economic growth. They serve not only as distribution centers but also as industrial zones, trading hubs, and energy supply bases.
However, ports are large civil engineering projects with substantial sunk costs. If a shipowner makes a poor decision, they can sell the vessel to recoup losses. However, a port authority would find it much more difficult and costly to dispose of a costly mistake. The Payra port remains a symbol of a poor investment decision and highlights the consequences of misdirected spending driven by corrupt motives.
Therefore, it is crucial that the CPA recalls the circular imposing the increased tariff. Before increasing tariffs, the Chattogram Port Authority should focus on reducing inefficiencies, including cutting pre-berthing turnaround times, increasing cargo handling rates, reducing idle vessel and container times, and eliminating corruption in operations and purchases.
If a tariff increase is necessary, it should be done in compliance with the law by forming a committee, rather than relying on a dubious consultant’s report.
Writer is an advocate at the Supreme Court of Bangladesh and the President of the Bangladesh Maritime Law Society.
