The Chittagong Port Tariff Overhaul: Navigating Economic Currents and Regional Competitiveness

Introduction: The Central Location of Chittagong Port and the Change Agent

1.1. Significance of Chittagong Port in Bangladesh Economy and Trade

Chittagong Port, also officially named Chattogram Port, is Bangladesh’s undisputed anchor of its foreign commerce. Its strategic value is unparalleled, for it enables the handling of a whopping 92% of the nation’s overall export and import tonnage. This singular statistic encapsulates its irreplaceable nature as the single key sea port that most directly fuels the country’s economic progress and international trade. The port has been growing steadily every year, reflecting a favorable trend for the economy of the country. In 2024, it broke new records by processing a record-breaking 3.27 million Twenty-Foot Equivalent Units (TEUs) of containers and a staggering 123 million tonnes of cargo.

The scale of trade that flows through Chittagong Port makes any significant alteration to its tariff regime not only a routine operational decision for the port authority but a high-impact economic phenomenon with cascading shocks to the entire Bangladeshi economy. Because 92% of the nation’s trade passes through one point here, any increase in cost at this port will automatically be propagated along the supply chain and billed to nearly all imports and exports. This, in turn, influences business raw material prices, consumer product prices, and, by association, the cost of living of Bangladesh’s 170 million people, industry observers say. Hence, the cost of port operation and the price regime are critical components of national economic stability and growth, so the rise in the tariff is a national economic policy move, not a local port decision.

1.2. Snapshot of the 2025 Tariff Revision: The Decades-long Overhaul’s First Major Overhaul

The government of Bangladesh has finally approved a complete overhauling of the tariff structure at Chittagong Port after almost forty years. This long period of five decades of moorings of tariffs is an important background to the recent changes and suggests a long-standing policy of keeping port charges static. This policy most likely contributed to the build-up of cost hikes in operating and delayed modernization, thus the current precipitous upsurge occurred nearly as a response rather than a foresight.

The finance ministry dated July 24, 2025, or July 15, 2025, granted a no-objection certificate (NOC), thus providing the port authority permission to introduce these new rates. All the details regarding these changes are given in an official statement titled “Tariff on Goods and Vessels, etc. for Chittagong Port Authority 2025”. Though CPA officials report an average tariff raise of about 60%, other reports cite an average of some 40% across 56 services. On closer inspection, however, it is evident that certain highly used services are to be increased much further, with the increases proposed reaching up to 440% and, in some cases, even 1,000 times over the current rates.

The revision process was claimed to involve the input of a number of concerned ministries and stakeholders. Despite such engagement, port users have been understandably upset, claiming that the decisions were made without their full input or consideration for their prior suggestions, leaving them “out in the cold”. This was supported by evidence that a June stakeholders’ meeting of 28 organizations had been left unresolved, with most rejecting the proposed rises.

The delayed long period without full tariff revaluations implies a failure in the system to revise port charges to dynamic economic conditions. For more than four decades, operating costs would grow inevitably with the rise in inflation, technological advancements, labor, and depreciation of assets. If tariffs were not raised, the port would be necessarily faced with soaring fiscal burdens and loss of ability to fund modernizing. The CPA 1’s 7,000% rise in operating expenses is a direct consequence of this extended background of underpricing. The current “drastic” rise is therefore less a matter of policy choice than a necessary adjustment of an extended fiscal imbalance. This historical inertia also suggests that if there is not a more sensitive and dynamic process of scrutinizing tariffs, massive, dislocating shifts like the current one may be necessitated in the future.

2. Historical Context of Chittagong Port Tariffs: A Legacy of Stasis

2.1. Development of Tariff from the Beginning till the 1986 Framework

The administrative structure managing Chittagong Port has undergone various alterations over a period of time. To begin with, it was administered by a Port Trust, which got reconstituted in the year 1960 and was finally dissolved by the issuance of the Chittagong Port Authority Ordinance of 1986. The restructuring was the direct reaction to the requirement to adapt to the port’s swift development and expansion requirements.

The port’s entry into the handling of containerized cargoes started small in 1977 with a mere volume of six TEUs. Post-Liberation War, the late 1970s witnessed a period of heavy infrastructural growth, starting with the upgrading of its older jetties. The growth of the ready-made garment (RMG) industry in the late 1970s, which rapidly became the backbone of the national economy, also required the modernization of the port. Later, beginning in the 1980s, the port authority engaged in groundbreaking structural overhauls, and the very first dedicated container jetties were constructed in 1986. On this alone, the port stayed for some years quite considerably under the 1986 tariff structure, highlighting a long history with no essential overhauls .

2.2. The Overhauls and Failed Attempts (1986-2024): Their Limited Revisions and the Aborted Essential Overhauls

Notwithstanding the existing 1986 tariff structure, some slight modifications were made in individual sectors in the financial year 2007-08. These modifications consisted of modifications to tug charges, water supply charges, wharf rent, and storage, stuffing, and unstuffing charges. The only notable, but highly contested, effort to implement a substantial change in tariffs was during late 2007 when the caretaker government had tried to introduce extremely high hikes, with some handling and related charges rising by as much as about 300%. But the majority of the increase brought about was later rolled back or not strictly applied after mass industry protests. On paper, the CPA only shows minor adjustments in FY2007-08.

Later efforts to modernize the whole tariff system were begun in 1996 and again in 2012, but these attempts did not lead to meaningful changes to the overall framework, ultimately coming apart. There was a specific update in 2013 with the gazetting of rates for the Pangaon Container Terminal, effective December 16, 2013, which would be a benchmark for the “current” tariffs prior to the massive remake in 2025. Realizing that the system still required a whole overhaul, the CPA engaged Spanish consultant company IDOM in 2020 to study and come up with a better rate structure. The company filed its suggestions in 2022, but implementation continued at a slow pace until the recent approval from the government.

The two instances of “stalled attempts” in 1996 and 2012, and the abortive 2007 effort to amend tariffs that was mostly reversed, reflect the ingrained political and economic hypersensitivity regarding port fees in Bangladesh. This trend reflects deep political and economic resistance to increasing trade expenses, likely driven by resistance by powerful business interest groups, such as the ready-made garment (RMG) sector, and mass-level inflation phobia. Tariff fluctuations as a politically fraught matter because of the strategic position of the port as a national economic pillar. The current “first major revision in near four decades” is therefore no mere administrative action but a breakthrough of an extended political impasse. This means that the fiscal pressures, such as the alleged 7,000% increase in cost of operation and the urgent need for modernization, have become so overwhelming that the government was forced to act despite anticipated resistances. This also creates issues with regard to whether future tariff adjustments would be sustainable if political will continues to be vulnerable to immediate economic pressures.

2.3. Reason for the Current Major Revision: Responding to Operational Costs and Modernization Imperatives

It is long overdue, as dictated by an unprecedented 7,000% rise in operating costs since 1986, that the new tariff adjustment is coming, according to the CPA. The cost increase-at worst-at almost four decades of minimal to no change in port tariff collection methods can only be termed as historically significant underpricing of port services. Such extended underpricing would have sharply limited the CPA’s ability to invest in essential modernization programs and sustain operational efficiency. Hence, the current tariff adjustment is viewed not just as a revenue-generating measure but as a tardy effort to correct this long-run financial disequilibrium and allow the port to function on a more viable economic basis.

The government’s declared aims for this revision are to develop the port, upgrade its service standards, and bring its tariffs in line with global standards. One of its strategic goals, as developed by the Shipping Adviser, is to “set the benchmark so that after taking charge the interested foreign investors in port development could decide their own service charges based on it”. This declaration asserts there is a deliberate action to render the port financially viable for private sector entry, thereby resulting in future public-private partnership or foreign operators in the terminal management. Through setting a higher revenue floor, the government aims to de-risk prospective private investment, which has been seen as a required step towards securing long-term infrastructural improvements and realizing substantial efficiency gains, even if it means short-run cost implications for users of the ports. The finance ministry’s approval letter clearly emphasized enhancing the quality of service and operating efficiency along with the new tariff policy.

The overt intention of “setting the benchmark” for foreign investors demonstrates a strategic realignment towards more private sector and foreign participation in port development. Foreign investors need a transparent, certain, and lucrative revenue stream to support extensive infrastructure investments. A traditionally undercharged port with stagnant tariffs provides a high-risk, low-return strategy. By increasing the tariffs to a higher economic viability point, the CPA is creating terminal management and port development into a more compelling financial climate for prospective public-private partnership and foreign direct investment. This is extremely significant in de-risking prospective private investments; hence, the attraction of the right quantum of capital and expertise would be needed. This indicates a strategic long-term vision for Chittagong Port beyond bridging working capital costs in the short run. This means in essence an acknowledgment that public funding alone is insufficient for the kind of massive modernization required to stay ahead of the curve in competitiveness, and private capital, foreign above all, is what’s urgently needed. This also combines the tariff hike with a bigger economic development strategy in the state, calling forth private sector efficiency and capital for infrastructure deemed important.

3. Detailed Analysis of the 2025 Tariff Structure: Unpacking the Hikes

3.1. Overview of the New Rates and the Stated vs. Actual Increase Difference

The no-objection certificate revised for the proposed tariff rates was issued on July 24, 2025. The proposed rates are now to be revised and published in a government gazette, becoming effective. The Chittagong Port Authority (CPA) now levies more than 150 services, which are grouped under 52 principal categories. In the new proposal, they are all grouped under 23 categories.

While CPA authorities state a average tariff hike of approximately 60%, or approximately 40% on 56 services, examination of some services accounts for much larger proposed hikes. Some categories are experiencing hikes of 440% or even 1,000 times current levels. This disparity means a strategic presentation of the overall increase, as averaging across numerous low-usage or low-absolute-increase services might result in a lower percentage headline. However, the big increases in high-usage, mission-critical services will disproportionately impact users at the port more. This divergence between reported and actual average effect on operational cost has the potential to erode confidence and reinforce stakeholder resistance because the perceived cost effect on firms is significantly higher than reported.

3.2. Specific Impacts on Key Service Categories

The proposed changes to tariffs across various service categories represent a significant shift in operational costs for port users.

Container Handling Tariffs:

Current (based on 2013 gazette and older information): Loading and unloading a 20-foot Full Container Load (FCL) container currently costs $43.40, or about Tk 15,000 (approximately $43). The unstuffing charge stands at $2.73. For harbor crane operations, a loaded 21-foot container is charged Tk. 480 per move. Quay gantry crane operations for a loaded 21-foot container are Tk. 1,000 per move. Container storage for a 20-foot FCL container, after an initial four free days, incurs a daily fee of $6 for the first seven days, increasing to $12 per day from the eighth to the twentieth day, and $24 per day thereafter. In Bangladesh Taka (BDT), this translates to Tk. 500 per container per day for up to the seventh day after the free period, Tk. 1,000 per day from the eighth to the twentieth day, and Tk. 2,000 per day for each subsequent day.
Proposed (2025): The tariff for loading and unloading a 20-foot FCL container is proposed to increase to $68, representing a 56.68% hike. This aligns with projections of Tk 25,000-30,000 (approximately $70) under the new rates. The unstuffing charge is set to rise to $6.41, a 135% increase. Export container handling costs are projected to surge by as much as 81%.

Bulk Cargo Tariffs:

Current (based on 2013 gazette and older information): A dock levy of $0.125 per metric tonne (MT) of cargo is currently imposed. Rent on import bagged cargo is Tk. 9.84 per 1000 kg per day after the free period. For import iron and steel, the rent is Tk. 17.84 per 1000 kg per day after the free period. Hoisting charges on cargo are Tk. 56.20 per 1000 kg.
Proposed (2025): An average 30% increase is projected for both import and export activities related to bulk cargo.

Vessel-Related Charges:

Current (based on older information): Port Dues are currently $0.241 per Gross Registered Tonnage (GRT). Pilotage for a 1,000 GRT vessel is $357.50. Tug charges for vessels exceeding 20,000 GRT are $632; for vessels between 200 and 1,000 GRT, tug charges are $158. Berthing or unberthing costs $88.50. Berth hire is $0.025 per GRT per hour.
Proposed (2025): Port Dues are proposed to increase to $0.306 per GRT, representing a nearly 27% hike. Pilot charges for 1,000 GRT vessels are set to jump to $800, a 123.8% increase. Tug charges for vessels over 20,000 GRT are proposed to soar to $3,415, a substantial 440% increase. Tug charges for vessels between 200 and 1,000 GRT are proposed to escalate to $615, a 289.2% hike.

Other Miscellaneous Fees:

Current (based on older information): Hiring mechanical equipment, such as forklifts, is currently $0.86. Demurrage for a 20-foot container, after four free days, is $6 per day, increasing to $12 after 12 days, and $24 after 21 days. The cost for a fire fighting tug is $30.
Proposed (2025): The tariff for hiring mechanical equipment, such as forklifts, is proposed to increase to $10.16, a steep 1,081% jump. The cost for a fire fighting tug is expected to see an over tenfold increase.

The extremely high increases for basic services like tug charges (440%) and forklift hire (1,081%) suggest that the CPA is selectively identifying some of the bottlenecks or high-cost components of its operations for aggressive cost recovery. These types of services are at the heart of port operations and efficiency. These sharp increases might be a direct response to the alleged 7,000% hike in operating expenses, particularly if these services carry high capital investment in new equipment (e.g., newer tugboats, newer forklifts) or high maintenance and fuel costs. This selective approach might also aim to dissuade certain inefficient practices or accelerate cargo flow by rendering delays more expensive. This puts a concentrated burden on specific operational details for port customers, which implies that companies with high reliance on these services will face a substantially greater cost increase than the “average.” This also pushes to the forefront the CPA’s own identification of where the greatest fiscal imbalances are.

The following table provides a clear comparison of selected key services at Chittagong Port:

Table 1: Chittagong Port Tariff Changes (Selected Key Services) – Current vs. Proposed

Service Category	Specific Service	Current Rate (USD)	Proposed Rate (USD)	Percentage Increase
Vessel-Related	Port Dues (per GRT)	$0.241	$0.306	27%
Vessel-Related	Tug Charge (>20,000 GRT)	$632	$3,415	440%
Vessel-Related	Pilotage (1,000 GRT)	$357.50	$800	123.8%
Container Handling	FCL 20ft Loading/Unloading	$43.40	$68	56.68%
Container Handling	Unstuffing Charge	$2.73	$6.41	135%
Miscellaneous	Forklift Hire (per hour)	$0.86	$10.16	1,081%

Note: Some rates were originally in BDT and converted to USD using an approximate exchange rate of 1 USD = 110 BDT for consistency where direct USD rates were not provided.

3.3. The Compounding Effect of Private Inland Container Depot (ICD) Hikes

The direct port tariff increases are not the sole source of rising costs for businesses. Private Inland Container Depots (ICDs) are also set to raise their charges by up to 44% starting September 2025. Furthermore, reports indicate that private container depots unilaterally hiked their handling fees by 30-100% effective August 1.

This creates a compounding effect across the entire logistics chain. The port, as the primary gateway, sets a precedent or creates a cost pressure that other logistics players, such as ICDs, then react to. ICDs may be facing similar underlying cost pressures or are simply adjusting their pricing in response to the overall upward trend in logistics costs. The combined effect of these multiple increases is a cumulative rise in the total cost of moving goods, from the ship to the final destination. Importers and exporters will ultimately bear these combined increases, as shipping agents, who initially pay many of these charges, will pass them on. This implies that the total financial burden on businesses will be substantially higher than just the direct port tariff increases, directly affecting the competitiveness and profitability of trade. This indicates a multi-faceted inflationary impact on goods, affecting consumer prices and the overall competitiveness of Bangladeshi products in international markets. It also points to a need for a holistic policy approach to logistics costs, rather than addressing port tariffs in isolation.

4. Stakeholder Reactions and Economic Implications: A Divided Perspective

4.1. Concerns from Businesses and Trade Bodies (BSAA, BGMEA, BICDA, Importers, Traders)

The sudden and substantial tariff increases at Chittagong Port have elicited strong opposition from key industry stakeholders. These include the Bangladesh Shipping Agents Association (BSAA), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and the Bangladesh Inland Container Depots Association (BICDA). These groups had previously advocated for a more modest tariff adjustment, suggesting an increase limited to 10-20%. Their primary concerns revolve around several critical areas:

Reduced Export Competitiveness: The increased charges are expected to compel foreign vessel owners and container operators to raise freight costs, directly impacting both export and import expenses. This is particularly critical for Bangladesh’s ready-made garment (RMG) sector, which accounts for approximately 84% of the nation’s export earnings. The RMG sector is already grappling with global challenges such as escalating energy costs, disrupted supply chains, and reduced demand in Western markets. Such significant hikes could lead to diminished capacity utilization, shrinking profit margins, order cancellations, job losses, and a potential shift of buyers to rival manufacturing hubs like Vietnam or India. The BGMEA’s vice-president noted that every extra cent in port cost erodes global competitiveness. The strong opposition from the RMG sector underscores its outsized influence on Bangladesh’s economy and trade policy. Given its 84% share of export earnings, the sector’s concerns about export competitiveness are not merely sectoral but represent a significant national economic vulnerability. This highlights the political economy of port tariffs in Bangladesh, where the interests of the dominant export industry are paramount. The government faces a delicate balancing act: modernize the port for long-term growth versus protecting the immediate competitiveness of its largest export earner. The RMG sector’s concerns are not just about profit margins but about the very survival of factories and livelihoods, making their opposition a critical factor in the political feasibility and economic success of the tariff revision.
Increased Import Costs and Inflation: The additional financial burden imposed by these tariffs will inevitably be passed on to consumers, potentially driving up product prices and exacerbating inflationary pressures within the country. This is a particularly sensitive issue given Bangladesh’s existing struggle with inflation. The Bangladesh Importers Association (BIA) and commodity traders warned that a 70-100% hike “could push many to the brink” amidst current freight and currency pressures. The chairman of BSM Group warned in 2021 that “all 170 million people will be affected” if port fees rise.
Lack of Service Improvement: A fundamental point of contention for stakeholders is the absence of a commensurate improvement in service quality accompanying the tariff increases. They highlight persistent issues such as prolonged vessel waiting times, slow loading and unloading operations, and delays in documentation processing. Industry bodies have consistently called for tariff adjustments to be explicitly linked to tangible service upgrades. Shipping agents noted that port productivity is low, with ships idling for approximately 3 days for discharge.
Insufficient Consultation: Despite earlier meetings, port users contend that the final decision was made without their full and meaningful input, leaving them feeling “out in the cold”. A stakeholders’ meeting in June, involving 28 organizations, reportedly concluded inconclusively, with many expressing opposition to the proposed hikes.

4.2. Government and CPA Rationale for the Hikes

The CPA and the government have articulated several justifications for the tariff revisions, presenting a counter-narrative to stakeholder concerns:

The CPA maintains that the revision is long overdue, citing a staggering 7,000% increase in operational costs since 1986. This argument posits that the previous tariff structure was unsustainable in the face of escalating expenses.
Officials claim that even after the implementation of the new rates, Chittagong Port’s tariffs will remain lower than those of Mongla Port and other major global ports. This comparative advantage is used to justify the increases as a necessary step to align with regional and international benchmarks.
The government emphasizes that the increases are essential for modernizing the port, enhancing its efficiency, and attracting international operators to elevate Chittagong Port’s global standing. While port revenue and surplus were high (Tk5,055 crore in 2024, up 21%), the modernization costs require higher rates, necessitating the tariff adjustment.
The finance ministry’s approval letter explicitly stipulated that the CPA must focus on enhancing service quality and operational efficiency alongside the implementation of the new tariff structure. Port Secretary Md. Omar Faruk stated that the impact on consumers will be “negligible,” given the overall trade volume.

4.3. Projected Macroeconomic Impact: Additional Expenditure, Erosion of Export Competitiveness, Threat to Employment, and the Dilemma of Sequencing Reforms

The combined financial impact of increased tariffs from both public (CPA) and private (ICDs) entities is estimated to impose an additional expenditure of approximately Tk 18 billion on the economy. This substantial burden will directly affect businesses involved in import and export activities, who will, in turn, pass these costs on to importers, exporters, and ultimately, to end consumers.

The timing of these tariff increases is particularly sensitive, given existing global economic headwinds and the imposition of new reciprocal tariffs by major trading partners, notably the United States, on Bangladeshi exports. This confluence of factors creates a compounding economic pressure, significantly increasing the cost of conducting trade through Chittagong Port. The immediate consequence is a direct erosion of Bangladesh’s export competitiveness, especially for price-sensitive sectors like the ready-made garment industry. If the cumulative costs render Bangladeshi products uncompetitive in international markets, there is a tangible risk that buyers may divert orders to other countries. This scenario poses a severe threat to export volumes, factory operations, and employment levels, potentially undermining the country’s fragile economic recovery.

A fundamental dilemma exists regarding the sequencing of tariff hikes versus efficiency improvements. Port users demand tangible service upgrades either before or concurrently with tariff increases, citing existing inefficiencies such as vessel delays and slow cargo clearance. Conversely, the CPA argues that increased revenue is indispensable for funding the necessary modernization and efficiency enhancements. This creates a cyclical challenge: if tariffs are raised without immediate, perceptible improvements, users perceive it as an undue burden, potentially leading to cargo diversion. Conversely, if the port cannot generate sufficient revenue, it struggles to finance the very upgrades that users demand. This situation points to the critical need for a phased approach to tariff implementation, demonstrably linked to measurable performance improvements, to foster stakeholder confidence and mitigate negative economic repercussions.

This “dilemma of sequencing tariff hikes versus efficiency improvements” highlights a fundamental trust deficit between port users and the CPA. Decades of static tariffs, coupled with persistent inefficiencies, have led port users to believe that increased revenue will not automatically translate into better service. The CPA, on the other hand, genuinely needs funds for modernization given the massive cost increases. This creates a vicious cycle where a lack of trust hinders investment, and a lack of investment perpetuates inefficiency. For the tariff hike to be successful and accepted in the long term, the CPA must implement a clear, measurable, and transparent plan for service upgrades, with public reporting on key performance indicators (KPIs). A “phased approach demonstrably linked to measurable performance improvements” is crucial to rebuild stakeholder confidence and ensure the economic benefits of modernization are realized, rather than just increased costs.

5. Comparative Regional Analysis: Chittagong’s Position Among Peers

5.1. Tariff Comparison with Kolkata, Colombo, and Port Klang

Chittagong’s tariffs generally remain lower by regional standards, though its service quality is noted to lag behind its peers. A comparative analysis of key tariff categories reveals this positioning:

Container Handling Charges (USD/TEU):

Chittagong: Currently charges approximately $43 USD for a 20-ft import container. The proposed raise would bring this closer to approximately $70 USD.
Kolkata (India) Port (SMPK): Charges about $60 USD per box for foreign cargo.
Colombo (Sri Lanka): Charges roughly $100 USD.
Port Klang (Malaysia): Charges approximately RM 345 (around $78 USD) per TEU, following a recent 15% hike. This is set to rise to RM390 by 2027.
Comparative observation: Even after the proposed increase, Chittagong’s container handling fees would still be lower than those in Colombo and Port Klang.

Free Storage Days:

Chittagong: Allows 4 days of free storage for import boxes before rent is charged.
Kolkata: Allows 5 working days (excluding holidays).
Colombo: Allows roughly 10 calendar days.
Port Klang: Typically allows 7 days (based on tariffs).

Storage Rent (per day):

Chittagong: Currently charges $6 per TEU after the free period, which is set to rise to $6.90. The port also quadrupled standard storage rent in March 2025 to discourage yard congestion.
Colombo: Charges approximately $4-6 per day after free time.
Kolkata: Charges about $3-4.
Port Klang: Its chart shows approximately RM3 (around $0.70) per TEU per day in the initial days, with higher rates later.

Vessel Port Dues:

Chittagong: Charges a base port conservancy fee of approximately 0.380 per GRT and quay dues; these are generally lower than Colombo’s or Port Klang’s.
Colombo: Charges 0.8C.
Port Klang: Charges M$1 per ton.
Kolkata: Port dues are set by the tariff authority but are typically $0.30-0.40 per GRT for foreign vessels.

The following table summarizes the comparative port tariffs:

Table 3: Comparative Port Tariffs (Chittagong vs. Regional Peers)

Port Name	Container Handling (USD/TEU)	Free Storage Days	Storage Rent (per day, USD)	Vessel Port Dues (per GRT/ton)
Chittagong	~$43 (current), ~$70 (proposed)	4	$6 (current), $6.90 (proposed)	~0.380 per GRT
Kolkata	~$60	5 working days	~$3-4	~$0.30-0.40 per GRT
Colombo	~$100	~10 calendar days	~$4-6	0.8C
Port Klang	~$78	7	~$0.70 (initial)	M$1 per ton

5.2. Qualitative Factors: Addressing Inefficiencies, Delays, and Hidden Costs that Offset Lower Official Rates

Overall, Chittagong’s official rates are lower, often by one-third or more, than many neighbors, a fact which authorities cite to justify the current hikes. However, port users consistently note that delays, congestion, and higher informal costs significantly erode this nominal advantage. This highlights a critical distinction between the nominal and real costs in port operations.

While the CPA justifies the hike by claiming Chittagong’s tariffs remain lower than regional peers, the counter-argument from port users about “delays, congestion, and higher informal costs” implies that the effective cost of using Chittagong Port is already higher than its official tariff suggests. These “hidden costs” and inefficiencies, such as ships idling for approximately 3 days for discharge, translate into demurrage charges, lost production time, increased inventory holding costs, and potentially unofficial payments. These factors, while not part of the official tariff, significantly inflate the total logistics cost for businesses. Therefore, a nominally cheaper port can be effectively more expensive due to operational inefficiencies. This suggests that a mere tariff increase without addressing underlying operational inefficiencies will not truly enhance Chittagong’s competitiveness. In fact, if the official rates rise without a corresponding drop in hidden costs or improvements in efficiency, the real cost burden on businesses will increase even further, potentially driving cargo to other ports if viable alternatives exist. The comparative analysis must therefore move beyond just tariff numbers to include a holistic assessment of logistics performance.

The disparity in free storage days, with Chittagong offering 4 days compared to Colombo’s 10 days, indicates a potential strategy by Chittagong Port to generate revenue from storage fees more quickly, or it may reflect severe space constraints within the port. Fewer free days mean that demurrage charges, which are also increasing, kick in sooner. This can be a revenue-generating mechanism for the port, but it also places immense pressure on importers to clear goods quickly. If customs processes, road infrastructure, or other logistical factors cause delays, importers will incur significant additional costs. This can also contribute to yard congestion if cargo cannot be moved out fast enough, despite the port’s attempt to use higher rent to discourage it. This policy, combined with the quadrupled standard storage rent in March 2025, suggests that the port is attempting to optimize yard utilization and generate revenue from storage. However, if the external logistics ecosystem (customs, transport) cannot keep pace, it will simply transfer the cost burden onto businesses and potentially worsen congestion, undermining the port’s stated goal of efficiency.

Compared to Kolkata, Colombo, and Klang, Bangladesh’s shippers may pay less in official tariffs but often incur extra time and may pay privately for stevedoring at private yards. Shipping agents argue that Chittagong is already inefficient and pricey, ranking as “expensive in the world” due to delays and hidden costs.

Conclusion: Balancing Modernization with Economic Stability

The 2025 Chittagong Port tariff overhaul represents a pivotal, albeit contentious, moment for Bangladesh’s trade and economy. It is a long-overdue adjustment aimed at rectifying decades of tariff stagnation and addressing a staggering 7,000% increase in operational costs. This revision is crucial for funding essential modernization initiatives and attracting private investment, which are vital for the port’s long-term viability and expanded capacity.

However, the implementation of these new tariffs has been met with significant resistance from key stakeholders. This opposition stems from the magnitude of specific hikes, which in many cases far exceed the stated average increases, raising concerns about transparency and fairness. Businesses and trade bodies are particularly apprehensive about the potential for reduced export competitiveness, especially for the vital ready-made garment (RMG) sector, which accounts for the vast majority of the nation’s export earnings. There are also significant concerns regarding increased import costs and the exacerbation of existing inflationary pressures within the country. The compounding effect of simultaneous tariff hikes by private Inland Container Depots (ICDs) further intensifies these economic concerns across the entire logistics chain.

A central tension lies in the sequencing of reforms: the port’s undeniable need for increased revenue to fund modernization versus the users’ demand for tangible service improvements to be delivered prior to or concurrently with these cost increases. This reflects a fundamental trust deficit, where port users, having experienced decades of static tariffs alongside persistent inefficiencies, are skeptical that increased revenue will automatically translate into better service. The CPA, conversely, genuinely requires the funds for the necessary investments.

The long-term success of this tariff revision hinges not just on the collection of increased revenue but critically on the CPA’s demonstrable commitment to enhancing service quality and operational efficiency, as explicitly stipulated by the finance ministry. Rebuilding and maintaining trust with port users through transparent communication, clear timelines for improvements, and measurable performance indicators will be paramount to mitigate the negative economic repercussions and prevent potential cargo diversion to other regional ports. Continued, meaningful stakeholder dialogue is essential to address ongoing concerns, fine-tune tariff application where necessary, and ensure that the port’s modernization benefits all participants in the trade ecosystem, ultimately bolstering Bangladesh’s position in regional and global trade.

The success of this tariff hike as a catalyst for modernization and increased efficiency will serve as a critical case study for future infrastructure development and pricing strategies in Bangladesh. This is the first major tariff hike in nearly four decades, driven by significant cost increases and a desire for modernization and foreign investment. If the CPA successfully implements the new tariffs, demonstrates tangible service improvements, and attracts foreign investment, it could become a blueprint for other underfunded or inefficient state-owned enterprises in Bangladesh that require modernization and private capital. Conversely, if it leads to severe economic disruption or fails to deliver on efficiency promises, it could deter similar reforms elsewhere. Therefore, the Chittagong Port tariff hike is not an isolated event but a bellwether for Bangladesh’s approach to infrastructure financing and public-private partnerships. Its outcome will have significant policy implications for the country’s broader economic development strategy and its ability to attract necessary investment for other critical sectors.

Furthermore, the tension between short-term economic pain, such as inflation and reduced competitiveness, and long-term strategic gains, including a modernized port and increased capacity, highlights a fundamental challenge for developing economies. In such economies, immediate economic stability, encompassing inflation control and job protection, is often prioritized due to social and political pressures. However, neglecting long-term infrastructure investment inevitably leads to stagnation. The tariff hike represents a decision to accept short-term pain for long-term gain. Effective governance will require navigating this trade-off by implementing mitigating measures and ensuring that the benefits of modernization are equitably distributed and clearly communicated. The success of this policy will depend on the government’s ability to manage the transition effectively. This includes not only the port’s performance but also broader macroeconomic management to absorb inflationary pressures and support affected industries. Failure to do so could undermine public support for essential reforms and create a cycle of economic instability.