Bangladesh’s weak logistics undermining global trade competitiveness: Speakers

Bangladesh’s sustained export growth as well as economic momentum risk being derailed by its outdated logistics system and high transport costs, observed speakers at a seminar held at the Dhaka Chamber of Commerce and Industry (DCCI) on Saturday.

The event, titled “Enhancing Bangladesh’s Logistics Sector for Sustainable Economic Growth,” featured a keynote by Dr M Masrur Reaz, Chairman of Policy Exchange Bangladesh. DCCI organised the event at its auditorium in the city.

Reaz said logistics bottlenecks were undercutting the country’s ability to compete in global markets.

Citing from the World Bank’s Logistics Performance Index 2023, Reaz said Bangladesh ranked 88th, while India and Vietnam stood at 38th and 43rd, respectively.

The situation is worse in the “trading across borders” category, where Bangladesh ranked 176th out of 190.

“Logistics costs in Bangladesh range from 15 to 48 per cent of product prices, depending on the sector. Our roads are congested, truck speeds average only 18 km/h, and manual cargo handling still dominates,” Dr Reaz noted.

He said a 25 per cent reduction in logistics costs could increase exports by 20 per cent, while a 1 per cent cut in transport cost or dwell time could raise exports by 7.4 per cent.

Despite some improvements, he stressed that the implementation of the 2024 National Logistics Policy and investments in multimodal infrastructure are urgent.

Reaz also emphasised the need to diversify both exports and markets, noting that the Ready-Made Garment (RMG) sector alone accounts for 82 per cent of Bangladesh’s exports, while the UK and USA together absorb over 70 per cent of the country’s total export volume.

Dr Sheikh Moinuddin, Special Assistant to the Chief Adviser on Road Transport and Bridges, said it is high time to act on logistics reform. “Vietnam has managed to build seamless logistics by working together. We have yet to demonstrate that kind of collaboration,” he said.

“We must make the National Logistics Policy work and develop a masterplan that integrates water, road and rail networks. Without coordination, our dream of efficient logistics will not be realised,” he added. 

IDCOL Executive Director and CEO Alamgir Morshed said the country would require $230 billion in logistics investment by 2032, and close to $1.0 trillion by 2041.

 “Long-term financing is a challenge. Most banks are burdened with non-performing loans. We need bond markets and multilateral support,” he said.

Humayun Kabir, Senior Project Officer (Transport) at the Asian Development Bank (ADB), said the ADB is currently supporting around $15 billion in projects in Bangladesh—20 per cent of which are in the transport sector.

“We are prioritising public-private partnership-based logistics development. A digital multimodal transportation master plan is also being prepared in line with the National Logistics Policy,” he said.

DP World’s Country Director Shamim Ul Huq said, “Our ecosystem and customers are different from the West. But we can still improve if we focus on standardised packaging, inspection and one-point clearance facilities.”

BUILD Chairperson Abul Kashem Khan pointed out that private and PPP investments in logistics are still below 2.0 per cent of GDP, against the 8–10 per cent needed. “Bangladesh needs at least $20 billion of FDI annually, but we are attracting only $1.0–2.0 billion.”

Md Habibur Rahman, Member, Chittagong Port Authority (CPA), said the port is expanding to handle up to 10 million TEUs by 2032. “But businesses must now develop the backward linkage to match this scale,” he said.

Rear Admiral (retd) Khaled Iqbal, former CPA Chairman, warned that lack of coordination across agencies slows down development. “We need to use inland container depots and rail to connect Matarbari Deep Sea Port. Relying only on roads is not sustainable.”

Bangladesh Inland Water Transport Corporation (BIWTC) Chairman Md Salim Ullah and former DCCI Vice President Abu Huraira urged for stronger policy implementation and waterway-focused logistics planning.

They urged the government to ensure full execution of the National Logistics Policy and support digitisation, cold-chain systems, and last-mile connectivity.

DCCI president Taskeen Ahmed moderated the programme.