Bangladesh has climbed two notches up in logistics index but kept languishing in the lowest position among four South Asian economies since 2019, prompting the government to make a policy for upgrading.
Agility Emerging Markets Logistics Index 2024 has ranked Bangladesh 33rd out of 50 leading emerging countries.
In 2023, Bangladesh's position was 35, climbing up four notches over 2022, with a score of 4.53 out of 10.
Overall score of Bangladesh in 2024 is 4.6 while Pakistan scored 4.82 to grab the 29th standing followed by Sri Lanka's 26th position, Malaysia's 4th, UAE's 3rd, India's 2nd and China topping all.
Though Pakistan slipped three notches in 2024 from 26, Sri Lanka improved from its 30th position. China retained top slot as usual like in previous years.
On February 6, 2024, Agility, a Kuwait-based global logistics company, published the score in its 15th annual edition.
On Domestic Logistics Opportunities, Bangladesh ranked 16th from earlier 17th, improving one step, while it slipped to 36th position in 2024 from earlier 33th in international logistic-opportunities gauge.
On business fundamentals, Bangladesh secured 42nd stand by climbing two notches up while jumped five notches to 30th on digital-readiness strand.
To improve country's logistics sector's index and bring discipline, the Prime Minister's office has drafted country's first-ever logistics policy which is set to be finalized soon.
The last date for submission of stakeholder opinion on the draft policy expires today (Tuesday). The Prime Minister's Office (PMO) put the draft policy on public domain on January 30, 2024.
Both stakeholders and policymakers have welcomed the initiative to frame a logistics policy with detailed nitty-gritty about how to catch up with the fast-moving economic dynamics.
However, some of the large investors in logistics sector have found few provisions of the draft policy unclear, and they fear bureaucratic complexities.
Shahida Sultana, Director-General of the Executive Cell and PEPZ of the PMO, says the policy has been framed after holding series of consultations with the stakeholders and accommodating their opinions.
"We will finalise the policy soon. The draft would be amended if businesses made any further recommendations on this," she adds.
Logistics-sector investors have underscored the need for a lead coordinator to manage the enormous sector that is vital for pivoting economic and financial activity.
Industry-insiders say unregulated logistics sector with no national policies and poor infrastructures has added up to the costs of imports at consumer-end, fueling inflationary pressures.
They find a lack of coordination among the relevant government agencies to handle the logistics sector.
"Some 20 government agencies and nine ministries are involved with the logistics sectors now. There is no dedicated authority for this sector," says Syed Ershad Ahmed, Country Manager and Managing Director of Expeditors (Bangladesh) Ltd.
Mr Ahmed, also President of the American Chamber of Commerce and Industry (AmCham), says importers often have to count demurrage for delay in releasing goods from ports for no fault of their own.
The AmCham president feels that there must be a dedicated authority to facilitate and coordinate the pivotal logistics sector.
"The purpose of the draft policy is not clear. I am afraid whether the policy would add new complexities in logistic sector," he says to underpin his suggestion for a brush-up.
Lead authority or a logistics-coordinating body has to be there to maintain consistencies among the entities.
Logistics sector faces different challenges such as out-of-order scanners, customs complexities and bank closure which have to be taken care of by a lead authority, he points out.
Such policies should be accompanied by relevant rules to speed up export-import operations, he says.
Fazlul Hoque, former president of Bangladesh Knitwear Exporters and Manufactures Association (BKMEA), hails the government move to frame the policy but urges not penalizing businesses on excuse of policy.
"When businesses failed to comply with the provisions of policy, the government officials took it seriously while the latter remained reluctant in many cases when it comes to serving businesses, claiming that policy has no legal obligation," he says.
He maintains that proper implementation of the policy matters than the formulation of a policy,
Dr Masrur Reaz, founder and Chairman of Policy Exchange Bangladesh, who was one of the drafting-committee members of the policy, says a time-bound legal and regulatory reform plan would be accompanied by the logistics policy to ensure its implementation.
"Policy is not a law, and usually comes with a broad outline to present an overview of a sector," he notes to dispel doubts.
He rules out any possibility of further operational complexities by the logistics policy as it has no such tricky guidelines.
"The major challenges of the logistics policy implementation would be establishing institutional coordination, appointing a dedicated lead authority for logistics sector and mindset to adapt to a disciplined operational procedure," he says.
He says connecting Public-Private Participation would be another challenge as it would be a difficult task for government to handle the gigantic sector alone.
Youngest member of the Board of Directors at Bangladesh Shipping Agents Association (BSSA) Tanjil Ahmed Ruhullah says lack of cooperation between public and private sectors is a large challenge to policy implementation which could be minimized by forming a lead coordination body.
There is no specific rule to develop multimodal transportation services, he mentions.
He regrets that customs-clearance process has yet to be automated fully and is a bit complicated as more than 20 manual signatures are required that causes an unusual delay, on average, of two weeks.
For this, exporters have to face difficulties to meet lead time, which affects their competitiveness, he says.
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