Launch of direct routes from Bangladesh

23 May 2022

They showed up like a bolt from the blue: direct routes from Chittagong, Bangladesh to Europe. It is a response by two shipping companies to demand from a market still battling with high tariffs from Bangladesh. A new, great big logistic development with enormous time savings to boot! How do you benefit as a forwarder?

Transhipment ports on the back foot for now

Due to a lack of both direct services and a deep sea port, cargo from Bangladesh is currently shipped via regional transit ports, also called transhipment ports. These ports are located in Colombo, Singapore, Port Kelang, and Tanjung Pelepas.

The containers are transported from these ports to their end destinations via the first available connection. The end destinations are mostly in Europe or America. The ship tasked with getting the containers to their destinations is called the Mother Vessel (M.V.).  You will commonly see this abbreviation on your Bill of Lading.

Container sea transport from Chittagong to Europe via transhipment ports currently takes about 40-45 days. The congestion, delays, and extra stop in transhipment ports means the total transit time is quite long.

From Bangladesh to Rotterdam in 3.5 weeks

A couple of shipping companies are now responding to demand from a market that is unfortunately still battling with high tariffs. The ships leave Chittagong every 10 to 15 days and reach Europe after 24 to 27 days. If there is sufficient interest, the services could possibly and temporarily add an extra fleet. A welcome addition in view of the usual 40 to 45-day lead time.

A British shipping company is set to launch its new service in May. These (smaller) ships will sail directly from Chittagong to the ports in Liverpool and Rotterdam. Permits for three ships of comparable size have been submitted. Granting of these permits is merely a formality now.

What’s more, a Swiss shipping company has announced a similar service, due to start at the end of May. This service will be chartered with three – somewhat smaller – ships. Together, they will form a link between the ports of Rotterdam, Barcelona, and Chittagong.

Who will benefit?

The clothing industry in particular cannot wait for the services to start. During the 2020-2021 financial year, Bangladesh exported goods to a value of $17.46 billion to Europe, about 45% of the country’s total export.

The summer of 2021 saw Bangladesh struggle with major congestion issues. Thanks to the marked reduction in transit times, companies from Bangladesh will be better able to compete with other Asian production countries. As such, it is expected that the clothing industry in Bangladesh will see a major boost.

However, it must be noted that this development could be short-lived. Further reductions in tariff levels could result in the decision to discontinue the services. There has to be profitability in this development, of course.

Would you like to find out more?

Are you curious about the options for your shipments? Contact your sales department via sales@ritra.nl or by telephone on (+31) (0)10 767100.