Taking port capacity to next level

The Port of Chittagong stands on the brink of a transformative change, driven by the involvement of leading global players in port operations and logistics. Dubai-based DP World, renowned for managing some of the world's most efficient ports and logistics networks, is reportedly in the final stages of negotiations with the government to take over operations of the New Mooring Container Terminal (NCT). Meanwhile, operational activities have already begun at the Patenga Container Terminal (PTC) under the management of Saudi Arabia's Red Sea Gateway Terminal International (RSGTI), marking a significant milestone in foreign participation. In addition, substantial foreign investment is expected in the construction and operation of Bay Terminal and Laldia Terminal projects, signalling a broader trend of international engagement that could further modernise the country's port infrastructure, boost trade capacity, and enhance regional connectivity.

Strategically located on the Bay of Bengal, Chittagong Port handles approximately 90 per cent of Bangladesh's total trade and 98 per cent of its container traffic. Despite some operational improvements in recent years, the port is still hamstrung by persistent inefficiencies that hamper its performance. The port lags far behind global standards: ships often have to wait several days offshore before berthing; container turnaround times is lengthy; and dwell times in port yards are excessive. The infrastructure upgrade has so far failed to keep pace with the rapid growth in trade volume.

According to the World Bank's Container Port Performance Index 2023, Chittagong Port ranks 337th out of 405 global ports. The report reveals that average ship turnaround time at the port is 3.23 days-significantly longer than Colombo Port's 0.86 days. Import clearance takes an average of 11 days, and export border compliance requires around 36 hours.

The World Bank estimates that reducing container dwell time from 11 days to the international benchmark of three days could save the national economy hundreds of millions of dollars annually. Improved port efficiency could enhance export competitiveness by as much as 15 per cent, especially benefiting labour-intensive sectors through job creation and higher wages. Needless to say that port facilities are an important consideration in the investment decisions of foreign investors.

In the current context of Bangladesh's economy, deeper integration into global value chains is essential for achieving sustained growth. This requires not only expanding export volumes but also diversifying both export products and export destinations. At present, Bangladesh exports approximately US$ 50 billion worth of goods annually. To realise the government's ambition of turning the country into a global manufacturing hub, this figure must increase severalfold. Meeting this goal will necessitate urgent and substantial upgrades to port infrastructure, aligned with global standards.

However, capacity development alone will not suffice unless logistical bottlenecks are comprehensively addressed. Weak connectivity between ports and inland transportation networks-such as roads, railways, and inland waterways-has been a major contributor to high costs and frequent delivery delays. While initiatives like the recently launched National Single Window (NSW) system aims to streamline regulatory processes, limited port capacity and outdated infrastructure continue to undermine seamless trade facilitation. 

According to the World Bank, logistics costs in Bangladesh range between 4.5 per cent and 4.8 per cent of total sector output-significantly higher than those in neighbouring countries and key trading partners. If Bangladesh makes specific improvements-like reducing delays at ports, improving road and rail connectivity, cutting red tape in customs, and streamlining the movement of goods-then total export earnings could rise by as much as 19 per cent. This means making logistics more efficient would make it easier and cheaper for businesses to export, making Bangladeshi products more competitive internationally. Additionally, the World Bank analysis indicates that a 1 per cent reduction in logistics costs alone could boost export demand for Bangladeshi products by around 7.4 per cent.

Developing a multimodal logistics system that links ports seamlessly with industrial zones and economic hubs is thus vital to realising the country's commercial potential. According to UN-ESCAP, better infrastructure alone could generate an additional US$ 35.5 billion in revenue for Bangladesh by 2030.

Major upcoming infrastructure projects such as the Matarbari Deep Sea Port and the Chittagong Bay Terminal offer a ray of hope to transform Bangladesh's port management landscape. These initiatives are expected to dramatically increase port capacity, shorten export processing times, and reduce shipping costs by up to 15 per cent. However, the success of such projects will hinge not only on sound initial planning, but also on the timely and efficient implementation of the projects.

Experts argue that Bangladesh has much to learn from global best practices. Vietnam's FDI-driven logistics strategy, for instance, has played a key role in improving port efficiency and enabling export diversification. Singapore's Port Community System-a digital platform integrating port users, customs, and other authorities-has streamlined processes, enhanced transparency, and accelerated trade flows. Adopting such best practices could help Bangladesh modernise its logistics ecosystem. Digital tools, including artificial intelligence, blockchain, and data analytics, can revolutionise customs clearance, reduce corruption, and improve real-time cargo tracking.

Bangladesh stands on the threshold of an economic transformation. To fully capitalise on this moment, the government must adopt a clear and forward-looking strategy. Encouraging private sector participation-particularly through public-private partnerships with globally reputed operators-offers a viable path to drive innovation, enhance efficiency, and attract critical foreign investment. At the same time, reducing public expenditure in inefficient sectors will help restore fiscal discipline. Streamlining customs procedures, lowering regulatory barriers, and embracing digital technologies are also vital to enhancing competitiveness.

A modern, efficient, and transparent logistics system is not merely an infrastructure upgrade-it is a prerequisite for economic transformation. With bold reforms, strategic investments, and international cooperation, Bangladesh can position itself as a major player in global trade and build a resilient, competitive, and inclusive economy for the future.

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