After facing severe logistics challenges in Bangladesh for years, A.P. Moller Maersk has started building a 200,000 square feet (18,580m²) custom bonded warehouse in Chittagong in partnership with locally owned Ispahani Summit Alliance Terminal Ltd (ISATL).
Maersk announced that construction of the new container freight station (CFS) has already commenced and Bangladesh’s exporters and their overseas buyers will be able to start using the facility from July 2022, once the first phase of the construction is completed.
“The custom bonded warehouse will be the largest of its kind in Chittagong, contributing towards decongesting the logistics ecosystem and solving longstanding challenges for local exporters and overseas buyers,” Maersk said in a statement.
Despite the impressive growth of garments’ exports from Bangladesh, the number of warehouses in Chittagong has not increased since 2012 with the sole exception of ISATL which became operational in 2018.
Optimising utilisation of available capacity assisted to an extent, however, it did not scale enough to meet the trade’s requirements.
The logistics ecosystem and the Chittagong Port get stretched, particularly during the peak seasons. In 2021, a fallout of this structural challenge was felt by all the stakeholders involved in import-export trade when the CFSs got clogged with cargo resulting in delayed clearance, stuffing and consequently dispatch of containers to the port.
Delay in offloading cargo also led to a longer truck waiting time, and delay in dispatch of containers to the port, consequently resulting in lack of overall productivity. These challenges have serious consequences on the overall economy of the country given the fact that the Chittagong Port handles in excess of 90% of the total containerised trade to and from Bangladesh.
ISATL operates four CFSs within Chittagong and a River Terminal at Dhaka. Under the scope of this partnership, ISATL will construct a brand new custom bonded warehouse within the existing premises of the facility located at Pathortoli in Chittagong.
The new warehouse will double the existing capacity at ISATL and add around 8% additional space to the existing ecosystem at Chattogram.
“By partnering with ISALT, we are establishing a facility that has the potential to partially decongest the system from the landside and streamline the flow of cargo in and out of Bangladesh,” commented Angshuman Mustafi, managing director of Maersk Bangladesh.
The Danish container shipping company will also offer customers garment on hanger facility, sorting, product audit, labelling, bar code, and RFID scanning, amongst others.
“We are proud to partner with Maersk on this exciting long term project where ISATL’s extensive local experience combined with Maersk’s international best practices will allow us to create a truly world-class facility that will help raise the standards for the entire industry”, said Yasser Rizvi, managing director of ISATL.
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