Multimodal Logistics Hub: A gateway between the East and the West

Reduction of costs and improvement of the quality of logistics and transport systems lead to improved access of different goods to international market thus increasing international trade and fuelling higher economic development of a country. In a country like Bangladesh, faster progress in the development of logistics will be crucial for sustaining competitive advantage. A balance among reduced logistical cost, better infrastructure, developed transport and logistics services and fast and less expensive bureaucratic services can result in the improvement of sustainable international trade competitiveness.

There is a strong connection between improvement of transport and logistics with the enhancement of export performance. A recent study indicated that one per cent lower shipping cost will enjoy 5-8 per cent more export market share and difference in infrastructure quality account for 40 per cent variation in transport cost. Additionally, liberalising the provision of port services could reduce the shipping cost by nearly a third.

Bangladesh has a vision involving Multi-modal Logistics Hub (MMLH). The country wants to be the 'Global Maritime Hub' by developing multimodal connectivity and a vibrant marketplace comprising diverse group of maritime service providers and more than 140-150 of world's top international shipping groups and logistics players. A comprehensive hub includes shipping and maritime services such as ship management, agency, finance, insurance, broking and surveying etc. Such a hub can also play an important role as a strategic centre for maritime sector where commerce, shipping and maritime ancillary services expand, flourish and create avenues for unprecedented economic development and opportunities for new businesses and employment for younger generation of the country.

Multi-modal Logistics Hub (MMLH) is an integrated centre for the trans-shipment, storage, collection and distribution of goods to the end users facilitating international trade by promoting value added services to the supply chain of various operators. A logistics centre, through multimodal connectivity, should preferably be served by a variety of communication modes such as road, rail, sea, inland waterways, air and pipeline within and outside the country through single charge and single document.

The strategic location of Bangladesh is a big plus point for the economy. While facing the Bay of Bengal and Indian Ocean, the connectivity of Bangladesh under the One Belt One Road (OBOR), which involves around 68 countries with a combined population of 4.40 billion constituting 40 per cent of the global gross domestic product (GDP), has created opportunities for establishment of a MMLH. Sustainable economic growth is possible through the development of international deep sea ports (DSPs), equipped with all modern facilities. These ports should be in appropriate locations, preferably at Sonadia (with an area of nine square miles and with natural depth of 14 metres), Maheshkhali facing the Bay of Bengal (terminal for coal, liquefied natural gas (LNG), liquefied petroleum gas (LPG), liquefied ethane gas (LEG), other heavy materials such as coal, steel, Aluminium and copper etc) and Kutubdia (terminal for crude and refined oil, Soybeans oil, Palm oil and other liquid products). Establishment of a maritime network under the OBOR initiative of China and an international airport comprising the areas stretching from Lakshmipur, Feni, Noakhali and Cumilla districts (close to the Deep Sea Ports, SEZs and having huge opening in the south) can also facilitate international trade.

Such a hub will act as a gateway between the East and the West and will be connected by high speed railways, international road, maritime and airways. The areas around the hub will be transformed into modern cities and business hubs like Dubai & Abu Dhabi of UAE, Qatar, Singapore, Malaysia and Shenzhen of China, Hong Kong etc.

DSPs at Sonadia, Maheskhali and Kutubdia can be as big and resourceful as ports like Rotterdam, Shanghai, Singapore and others. Such a multimodal hub can act as a gateway for this region and to the rest of the world by providing shortest land connectivity routes to the deepest waters while saving thousands of kilometres worth of transport costs and time.

Due to the location of Bangladesh, proposed DSPs in the country can be connected with 600-650 ports from over 120-130 countries of the world. There can be annual calls of 150,000-160,000 vessels, each handling over 2,000 to 2,500 containers with turn- around time of less than 10-12 hours. Such services can ensure reliable, value-added and cost-efficient marine services and facilities to users.

Vessels passing through Bangladesh will be monitored by the Logistics Hub Authority using the modern Vessel Traffic Information System (VTIS), which has the capability of handling more than 10,000 tracks at any one time.

These deep sea ports can be built by the Bangladesh government with funding from OBOR, Asian Development Bank (ADB), World Bank, Japan International Cooperation Agency (JICA) etc. Under the MMLH, one of the world's largest petrochemical refineries and the most technically advanced and efficient shipbuilding and ship-repair facilities in Southeast Asia will be built. Production Storage and Offloading (FPSO) conversion market will also be establish in the areas adjacent to the proposed port at Maheshkhali.

The existing sea ports at Chattogram, Mongla and Payra will operate container ships with capacity of up to 4500 TEUs and bulk carrier of up to 15,000MT which will directly go to the countries where trans-shipment will not be required.

In addition to offering reliable and efficient cargo handling, the deep sea ports will also be transformed in to one of the top bunkering (refuelling of ships) ports in the world, filling more than 50-60 million tonnes of bunkers (fuel for ships) annually. Refineries with capacity of about 100 million tonnes of high quality fuel will be built at Kutubdia port site to facilitate bunkering of ships (present annual capacity of refinery in Bangladesh is only 1.5 million tonnes) and aircrafts. Pipeline for transferring fuel from the refineries to the airport will also be constructed for uninterrupted supply of fuel/gasoline. Bunker supply chain will be brought under automated system, enabling oil majors, tank storage operators, bunker traders, surveying companies, shipping lines, bunker vessel operators and testing labs to connect through one interface seamlessly.

There should be provisions for establishment of LNG storage and re-gasification facilities of equivalent amount of liquid fuel at Kutubdia or at any other suitable island nearby.

A modern international airport with all logistical support should be built in a suitable place in any of the areas in Lakshmipur, Feni, Noakhali and Cumilla districts while abiding the International Aviation Rules and Standard. While being integral to the MMLH, this airport will also be connected with all the domestic airports of the country.

Establishment of MMLH, along with the construction of DSPs, an international airport and related infrastructures, will usher a new horizon of hope, aspiration, prosperity and sustainable socio-economic security for the people of Bangladesh. In order to ensure equity and growth, participation and involvement of the people during the process of establishment and management of this project needs to be ensured. The implementation of this mega project essentially relies on strong political will, vision and honest leadership of the nation. 

Dr. Md. Shafiqul Islam Ph.D is a former secretary of the Government of Bangladesh

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