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Bangladesh starts WTO pilot scheme to cut port congestion

BANGLADESH is introducing a system of Authorised Economic Operators (AEO) to speed freight flow and reduce congestion in ports and on highways, reports IHS Media.

The AEO pilot scheme will begin, with the blessing of the World Trade Organisation (WTO), with two to five companies this month and a fully-fledged programme will start within a year.

"We want to release goods from the ports as fast as possible," said AEO technical and operational advisor Mohammad Ehteshamul Hoque. 

The goal will mean almost no physical check on import and export containers, nominal bank guarantee submission, and deferred payment if all goes according to plan.

Implementing an AEO programme is mandatory because Bangladesh is a signatory to the trade facilitation agreement of the WTO.

Chittagong port congestion gets worse every year from April to September, creating massive supply chain disruption for importers and exporters. 

The port handled 2.3 million TEU last year, well in excess of its designed capacity of 1.7 million TEU, and volume growth this year is similar to that of 2016.

Vessels in Chittagong wait up to 10 days in the outer anchorage after an accident took out half of the port's ship-to-shore gantry crane capacity. 

Congestion hit production in factories because they did not have the inputs they needed to produce goods.

"It's a good initiative to make export-import activities faster," said Abdus Salam Murshedy, president of Exporters Association of Bangladesh.

It is not necessary to scan 100 per cent of the containers moving through the ports, which ultimately increases congestion, he said.
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