In the heart of South Asia lies a nation adorned with vibrant landscapes and a rich cultural heritage-Bangladesh. This emerging nation is on the cusp of significant development, as evident from recent strides taken in its logistics sector.
As Bangladesh transitions into the status of a developing nation, it finds itself at a critical juncture where numerous challenges loom ahead. Chief among them is the need for a highly competitive lead time, robust logistical services, and multimodal logistical developments. Recognizing the importance of an efficient logistics system in propelling the nation's progress, officials and policymakers are increasingly acknowledging the significance of nurturing this sector and working closely to address its demands.
Currently the sector is facing inadequate infrastructure, congestions in the roads, inefficient border crossings, lack of warehousing facilities, limited adoption of technologies and inconsistent policy implementations which are badly affecting the overall logistics performance, hampers timely delivery and transportation of goods, increase transportations costs and time and there is slow digital transformations in tracking systems, digital documentation and automation.
To address the challenges faced by the logistics sector and align it with the country's growth aspirations, the Bangladesh government has recognized the need for policy support and initiated certain measures. Some of these measures are forming national logistics policy, investment in Infrastructure, digitization initiatives, special economic zones, customs simplification, public-private partnerships and skill developments.
In this regard the Ministry of Industries announced a comprehensive Industrial Policy on September 25, 2022, marking a significant change by including logistics as a crucial sector for export diversification. For the first time, logistics has been recognized as a thrust sector, highlighting the government's commitment to its development. The policy encompasses 21 sub-sectors within the logistics industry, emphasizing the government's intention to prioritize logistics growth in the coming years.
Various studies have been conducted to compare Bangladesh's logistics performance with other countries. These studies have highlighted the need for further improvements in the country's logistics infrastructure to achieve its goal of becoming a developing country by 2026 and a developed country by 2041.
On the other hand a 29-member committee has been established by the government to design a national logistics development policy aimed at optimizing the transportation of goods and services and fostering the comprehensive advancement of the logistics industry.
The director general of the PMO executive cell will serve as the member secretary of the committee.
The committee's primary responsibilities include crafting the National Logistics Development Policy, extending policy assistance, and facilitating the effective implementation of existing policy frameworks to attract investments in the logistics sector.
Additionally, the committee will offer comprehensive guidance in the formulation of policies and development strategies specifically tailored for the logistics sub-sector.
These two recent developments indicate that significant efforts are underway to enhance the logistics sector in Bangladesh. Leveraging our advantageous geographical location, which provides extensive access to a vast sea area, coupled with the presence of two natural sea ports, the country's economy is experiencing continuous growth. The government has made substantial investments in infrastructure development, and the private sector has also made significant progress, particularly in the areas surrounding the Chattogram port.
In comparison with Bangladesh several Asian countries have already devised policies to enhance their logistics systems and developed infrastructure aiming to accelerate economic growth. For example Vietnam also prepared a national logistics action plan for integration of all services through a holistic approach. They have identified that lack of connectivity between all modes of transport is one of the problems which is similar to ours.
They are looking for non-asset based logistics support service providers such as-- truck brokers, freight forwarders, 3rd party logistics etc to be on board so that more discipline can be ensured.
Over the past several decades with private sector investments there are huge developments in Inland Container Depots (ICDs) which are facilitating exports. The depots play an important role in the country's economy. Its importance is growing every day in parallel with the country's economic growth. Currently almost 98 per cent of exportable goods are being dealt in the ICDs. As a result exporters are relieved from port congestion caused delays and now they do not miss scheduled time for shipments.
Presently to facilitate exports, 19 Inland Container Depots (ICDs) play a pivotal role in handling exports. These facilities adhere to global standards, effectively facilitating exports and contributing to the steady growth of the country's foreign exchange earnings. Apart from ICDs other logistical sectors should be developed to further bolster the offshore trade of the nation.
In Bangladesh there are about ten ministries, twenty four government agencies looking after the logistics sector. As in other countries, there is a need for a focal point ministry so that discipline can be brought in this sector and logistics cost can be reduced. Most important is to ensure smooth coordination so that with a single document whole logistics support services can be ensured.
It is seen from the statistics that the global economy will be about $ 9 trillion bigger by 2030 by improving trade facilitation activities which can lower average trade costs by 14 per cent. So to be in the competitive race of lowering business costs logistics is a prime component which development is inevitably needed.
Logistics infrastructure development has been treated as one of the key factors in ensuring industrialization in today's competitive and complex business age. We need to achieve our targets of export diversification, employment generation, increased investment and FDI for further socio-economic development. Our focus would need to be concentrated on advanced logistics infrastructure development.
In the proposed National Logistics Development Policy there should be simplified terms and conditions aiming to strengthen the sector.
Bangladesh cannot be behind while other South and Southeast Asian countries are taking the lead in extending logistics support and have already set out policies and strategies.
Providing transit to neighboring countries with existing road infrastructure is another important issue in the logistics sector. Recently amid increased transportations for Bangladeshis vehicles for goods movement India is allowed to carry its goods via Bangladesh by using roads. It is a government to government decision. But as a businessman I see the existing conditions of our roads are not good enough. When heavy vehicles of the countries will move there will be a need for strong road constructions keeping in mind that there will be heavy vehicle transportations. Its maintenance is inevitably needed so that both countries' vehicle movement will be benefited in terms of reducing speed and hassle free vehicles movement.
In this regard road Infrastructure and maintenance, speed management, regular monitoring and evaluation, repairs, and resurfacing are needed to ensure the roads remain in good condition that can accommodate heavy vehicle traffic.
By focusing on these logistics aspects Bangladesh can optimize their road networks to facilitate the movement of goods, reduce delays, and create a hassle-free environment for vehicles.
The writer is president of Bangladesh Inland Container Depot Association (BICDA) and Chairman of Qns container Services Ltd, Qns Shipping Logistics Ltd, and Qns Enterprise Ltd
