A recently published World Bank report states that in order to meet the needs of its growing economy and to boost export growth, Bangladesh needs to improve its transport and logistics system. The report- titled “Moving Forward: Connectivity and Logistics to Sustain Bangladesh’s Success”- finds that by making logistics more efficient, Bangladesh can significantly boost export growth, and maintain its position as a leading readymade garments and textile producer. The report states that if there was no congestion on the road, transportation costs, the largest direct logistics cost in Bangladesh, would be 35 percent lower.
The report warns that congestion on roads and in seaports, high logistics costs, inadequate infrastructure, distorted logistics service markets, and fragmented governance hamper manufacturing and freight, further eroding Bangladesh’s competitive edge and putting its robust growth path at risk.
It is clear from the report that Bangladesh’s congested transportation and often unsophisticated logistics systems impose high costs to the economy. By making its logistics more efficient, Bangladesh can significantly optimize its connectivity, business environment, and competitiveness, putting the country on the right path to become a dynamic upper-middle-income country. Therefore, addressing efficient logistics and transportation system as the building blocks for achieving high export growth, the government should take necessary steps for improving these sectors in no time.
The solution to logistics is not just to invest
more but to invest better, by focusing on the
service gap, and creating the incentives for
high quality and competitive logistics services
In Bangladesh, the average cost of carrying a tonne per kilometre in Bangladesh is USD 0.095, which is higher than many developing and developed countries, including the US, France, Australia, India, and Pakistan. The average waiting time of an export container at the Chattogram Port is four days, while for an import container, it is 11 days. In order to reduce congestion on roads more emphasis should be given on railway and riverine transport. The government should work on making a sustainable plan to improve all the modes of transportation.
Improving Bangladesh’s logistics requires a system-wide approach based on greater coordination among all public institutions involved in logistics. At a regional level, harmonizing its logistics systems and aligning its customs with that of its neighbors could turn Bangladesh into an important node for regional freight flows and further boost its trade. There’s no doubt that reforms and investments for better transport and logistics will yield Bangladesh substantial economic benefits and strengthen its competitive advantage. But the solution to logistics is not just to invest more but to invest better, by focusing on the service gap, and creating the incentives for high quality and competitive logistics services.