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Outdated logistics eroding BD's competitive edge: Experts

They estimate $230b investment needed by 2032


FE REPORT | Monday, 30 June 2025



Bangladesh's sustained export growth and economic momentum risk being derailed by an outdated logistics system and high transport costs, experts and speakers have warned.
At a seminar titled "Enhancing Bangladesh's Logistics Sector for Sustainable Economic Growth" hosted by the Dhaka Chamber of Commerce and Industry (DCCI) in the capital on Sunday, they underscored how logistics bottlenecks are undermining the country's global competitiveness.
The event featured a keynote by Dr M Masrur Reaz, chairman of Policy Exchange Bangladesh (PEB).
Citing the World Bank's Logistics Performance Index 2023, Dr Reaz noted that Bangladesh ranked 88th, far behind regional peers like India (38th) and Vietnam (43rd). In the "trading across borders" category, the country fared even worse -- ranking 176th out of 190.
"Logistics costs in Bangladesh range from 15 to 48 per cent of product prices, depending on the sector. Road congestion, an average truck speed of 18 km/h, and manual cargo handling are significant constraints," said Dr Read.
He added that a 25 per cent reduction in logistics costs could boost exports by 20 per cent, while cutting transport cost or dwell time by just 1.0 per cent could increase exports by 7.4 per cent.
Although some progress has been made, the PEB chairman emphasised the urgent need for effective implementation of the 2024 National Logistics Policy and large-scale investments in multimodal infrastructure.
He also called for export diversification, pointing out that the RMG sector accounts for 82 per cent of exports, with the UK and USA absorbing over 70 per cent of the volume.
Dr Sheikh Moinuddin, chief adviser's Special Assistant on the Ministry of Road Transport and Bridges, echoed the urgency for reform. "Vietnam has built seamless logistics through collaboration. We've yet to demonstrate that level of coordination," he said.
"To realise efficient logistics, we must implement the National Logistics Policy and create a masterplan integrating road, rail, and waterways."
Alamgir Morshed, executive director and CEO of Infrastructure Development Company Limited (IDCOL), estimated that Bangladesh would need $230 billion in logistics investment by 2032, rising to nearly $1 trillion by 2041.
"Long-term financing remains a challenge as banks are burdened with non-performing loans. We must tap into bond markets and multilateral financing," he said.
ADB senior project officer Humayun Kabir stated that the development bank is currently supporting about $15 billion in projects in Bangladesh, 20 per cent of which are in the transport sector.
"We are prioritising PPP-based logistics development and preparing a digital multimodal transportation masterplan aligned with the National Logistics Policy," he added.
Shamim ul Huq, country director of DP World, highlighted the need for standardised packaging, streamlined inspection, and single-point clearance to overcome local challenges.
"Our ecosystem is different from the West, but improvements are still achievable."
Abul Kashem Khan, chairperson of BUILD, pointed out that private and PPP investment in logistics is still below 2.0 per cent of GDP, against the 8-10 per cent needed.
"We need at least $20 billion in FDI annually, but are attracting just $1-2 billion," he said.
Mahbubul Anam, managing director of Expo Group, stressed that infrastructure, regulatory reforms, and skilled manpower are essential for reducing cost and improving speed.
Md Habibur Rahman, member of the Chittagong Port Authority (CPA), said the port is expanding to handle up to 10 million TEUs by 2032, but businesses must develop adequate backward linkages.
Former CPA chairman Rear Admiral (retd) Khaled Iqbal warned that a lack of inter-agency coordination hinders development.
"We must utilise inland container depots and rail links to connect with Matarbari Deep Sea Port. Sole reliance on roads is unsustainable."
DCCI President Taskeen Ahmed moderated the seminar, while Md Salim Ullah, chairman of BIWTC, and Abu Huraira, former vice president of DCCI, called for stronger implementation of the logistics policy with greater focus on waterways, digitisation, cold-chain development, and last-mile connectivity.

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