News / X-Press Feeders sees Chittagong losses rise thanks to locals-only rule

X-Press Feeders' SOL Promise was unable to fully load Photo: VesselFinder

Three X-Press Feeders’ container vessels are facing severe service disruption in Chittagong port due to the “unexpected” strict implementation of Bangladesh’s Flag Vessel (Protection) Act.

The act mandates that at least 40% of sea-borne cargo relating to the country’s foreign trade has to be carried by Bangladesh-flagged vessels – despite local operators having only a few ships.

Last week, two Straits Orient Lines ships faced similar service disruption, but were issued waiver certificates on the basis that no local tonnage was available.

On Friday, Xpress Feederstold customers the XP Dhaulagiri arrived at Chittagong on 9 October, adding: “However, upon completion of cargo operations, [the] vessel has been shifted to anchorage [and is] waiting for required export waiver certificates, which are not yet received from related authorities.”

SOL Promise, a sister vessel, arrived at Chittagong on 11 October and completed discharging operations the following day. However, the local authorities told the local agent they allowed cargo operations for only 24 hours and notified the port authority to suspend export cargo loading.

The ship managed to load only 110 teu of export containers, with more than 600 teu unable to be loaded.

Xpress said: “This is impractical for [the] vessel to complete 1,228 moves within 24 hours, at current productivity and efficiency of Chittagong Port.”

Another vessel, the XP Lhotse, arrived at Chittagong on 12 October, said Xpress, adding: “It was granted [an] export waiver which [was] subsequently revoked by authorities without any sufficient notice and justifiable reasons.”

Xpress told customers: “We will continue to coordinate with authorities to reinstate the export waiver, but there may be a possibility of disruption to loading operations as a result from current situation.”

The operator’s next vessel, X-press Nilwala, reached Chittagong port on Friday, and has yet to receive an export waiver certificate. It was due to leave, loaded with exports, tomorrow.

The operator said: “X-press Feeders is relentlessly working with Bangladesh authorities and relevant stakeholders to obtain required permission needed and/or any other solutions to ensure service continuity and frequency, which is paramount to our customers and overall Bangladesh trade.

“This turn of events is unexpected, and we are doing everything possible to find a solution.”

Michael Rodrigues, senior general manager of Sea Consortium Bangladesh, the local agent of X-Press Feeders, said the authorities implemented the act to support local shipowners and the authorities probably want foreign vessels to shun Bangladesh operations, with local operators filling the gap.

However, there is only one local shipping line, HR Lines, which has just eight ships.