Bangladesh's rapid economic growth, robust industrial expansion, and increasing global trade integration have created an urgent need for an efficient and modern logistics sector. Despite notable progress, challenges such as high transportation costs, limited multimodal integration, infrastructural bottlenecks, regulatory inefficiencies, and digital gaps continue to hinder the sector's performance. Against such a backdrop, The Financial Express organised a roundtable discussion titled "Challenges, Opportunities, and Way Forward in Shipping & Logistics Landscape" on August 17, 2025 at Lakeshore Heights in Dhaka to assess challenges, explore strategic reforms, and recommend actionable solutions for the sector. The event brought together policymakers, industry leaders, logistics service providers, regulators, investors, and infrastructure experts. Mohammed Yousuf, Senior Secretary at the Ministry of Shipping, joined the discussion as the chief guest and Dr Ahmed Ullah, Director General at Chief Adviser's Office, as the special guest. Shamsul Huq Zahid, Editor at The Financial Express, chaired it while
Md Mamun Habib, Ph.D, Professor at Independent University, Bangladesh presented the keynote paper and Shiabur Rahman (Shihab), Head of Online & Digital Content at The Financial Express, moderated the session.
Bangladesh's inefficiency in logistics is driving up costs and discouraging foreign investment. Last year, the country attracted only $3 billion in FDI, mostly from existing investors, while India drew $250 billion and Vietnam $18 billion. Without urgent reforms, the country risks losing competitiveness. To address this, the government is finalising a National Logistics Policy within a month. The draft has identified 62 major coordination challenges across agencies. Two high-powered committees, chaired by the Chief Adviser and the Principal Secretary to the Chief Adviser, are working on execution, with input from the World Bank, ministries, and private sector stakeholders.
The long-delayed Bay Terminal project is finally moving forward. A World Bank-financed breakwater loan is being signed, with tender evaluations expected soon. By December, at least one terminal should be awarded to a contractor. By 2036, the Bay Terminal is projected to handle 5.3 million TEUs -- nearly thrice the Chattogram's current capacity -- through three terminals to be developed under a PPP model by Chatttogram Port Authority, PSA Singapore, and DP World.
Other initiatives include a master plan for Matarbari Phase-II, covering LNG and LPG terminals and a dockyard under CPA. Ports are also embracing digitalisation with e-document submissions and e-auctions. On the rail side, the government will allow the private sector to run at least one container train on the Dhaka-Chattogram route to ease pressure. Tariff reforms are underway, yet no sudden hikes will be introduced without consultation. A Port Community System is also being developed to integrate Mongla, Payra, and Chattogram ports. Additionally, the government is reviewing the 7.5 per cent VAT on ship imports, which discourages investors. We're working to achieve some goals -- cutting costs, removing bottlenecks, and making Bangladesh a stronger, more competitive player in global trade.
The National Logistics Policy 2024 was formulated at the initiative of the Chief Adviser’s Office. A few speakers have suggested that it would be better if the policy and related legal matters are handed over to other departments. Maybe there was a reason it was given to the Chief Adviser’s Office. Anyway, I will certainly convey this message.
There are two committees working in this area. One is the National Council for Logistics Development, where the Chief Adviser — or Prime Minister — is the chair, and the Principal Secretary to the Chief Adviser is the member secretary. The other is the National Logistics Development Coordination Council, where the Principal Secretary is the chair and I am the member secretary. Logistics involves so many inter-ministerial issues and there remain usual chain-of-command challenges within the bureaucracy. It might have been thought that keeping the matter under the Chief Adviser’s Office would make coordination and control easier. We’ve found some faults in the policy. So we’ve decided to revisit it. And from today’s discussions, it’s clear there are many valuable points we can still include. With those inputs, we should be able to prepare a comprehensive logistics master plan.
Logistics is an extremely important issue, but unfortunately, it does not receive the attention it deserves in national discussions. Today's deliberations have clearly shown just how crucial the subject really is for our economy. Of course, in one sitting we cannot cover the entire spectrum of logistics challenges, but this seminar has opened an important window. We hope to organise more, with broader participation from stakeholders across the supply chain.
Why is this so urgent? Because logistics is not just about moving goods-it is about competitiveness, sustainability, and the wellbeing of our people. If we can reduce logistics costs by even 25 per cent, our exports could rise by a similar margin. That alone demonstrates the enormous impact this sector has on our national goals, including the $100 billion export target. But it is not only exporters who benefit. Poor logistics raises costs at every stage-from producer to distributor to final consumer. In the end, it is ordinary people who bear the burden of higher prices. As policymakers and practitioners, we should always keep their struggle in mind. Therefore, let us take today's discussions forward into concrete reforms, ensuring logistics becomes a true enabler of growth.
Over the past two decades, Bangladesh's exports and imports have grown steadily, with Chattogram Port handling about 85 percent of trade-the true heartbeat of our logistics industry. However, the logistics sector faces major challenges. Infrastructure is weak, transport systems are not integrated, and warehouses often fail to connect. Regulations create further hurdles. A national logistics strategy has long been talked about, but without full implementation, efficiency at the international level will remain difficult. Another pressing gap is skilled manpower.
Globally, logistics is measured through performance indexes. Bangladesh has improved slightly on the Logistics Performance Index, moving from rank 100 in 2018 to 88 in 2023, but India and Sri Lanka remain far ahead. Our weakest areas are infrastructure, customs, and basic business fundamentals. So clearly, there's work to do. Still, opportunities exist. Inland container depots are expanding, export targets are rising, and investors are willing to invest-if we ensure a business-friendly environment. What is urgently needed is execution. Enough committees and discussions-it is time to act.
Bangladesh must embrace automation, digitalisation, and technologies like AI, IoT, and blockchain. Equally vital are ethics, mindset, and resilience against disruptions
Bangladesh is nearly five decades behind in logistics because, until recently, it was never recognised as a distinct sector. There is no comprehensive policy, regulatory framework, or structured market development.
The challenge is becoming sharper. We are entering a tougher phase of global trade competition. Our production and export costs are already high, and they will rise further with new US tariffs and our upcoming LDC graduation. As a producer of low-end goods with slim margins, any slip will hurt exports. But there is also an opportunity: more efficient logistics could cut costs and even turn global shifts in value chains into a competitive advantage. This, however, demands bold and decisive action. We must focus on implementing a logistics master plan that integrates multimodal systems and develops PPP projects. The Bay Terminal should be prioritised. Ports are another critical issue. Chattogram, our main trade gateway, is still managed entirely by the government. That model cannot deliver the efficiency we require. Reform is essential, and engaging global private operators is the only realistic path to unlocking full potential. Bangladesh cannot afford to keep dragging its feet. Logistics reform is not optional-it is urgent.
There are many smaller reforms that could make a huge difference. These are not major national issues, but urgent obstacles that directly affect exporters. If we can clear these bottlenecks, which are well within our capacity, reaching the $100-billion export target is possible. But the problem is that the government doesn't engage with stakeholders. Large-scale reforms take time, but smaller ones could be implemented quickly with political will.
The Bangladesh Flag Vessels (Protection) Act, 2019 contains a discriminatory clause requiring government-owned goods to be carried only on government-owned vessels. This denies private flag vessels a level playing field.
Ocean-going ships can be a big source of foreign exchange for us. We convinced the government, and they agreed. They passed a law giving all Bangladeshi ships tax exemption until 2030. At that time, we had 35 ships. Because of the tax break, investment flowed in, and the number went up to 102. Then suddenly, the government withdrew the tax exemption. Now what happens to all those ships in the pipeline? Even NBR and its Chairman admitted it was a mistake-but they still haven't repealed it.
Bangladesh also has a pool of skilled marine engineers who could earn significant foreign exchange if properly supported. Instead, unnecessary restrictions hold them back. For example, a purchased ship cannot be sold within three years-an impractical rule that deters investment. Practical reforms, if implemented swiftly, could unlock growth, boost investment, and strengthen Bangladesh's global competitiveness.
We have identified the National Board of Revenue (NBR) as the biggest challenge for logistics. Every file requires the approval of a specific official, and without that consent it cannot proceed. This creates a serious obstacle for business.
A similar issue is evident at Chattogram and other ports, where demurrage and detention charges often arise. The absence of accountability leaves businesses bearing the burden. If customs are responsible, customs officials must be held accountable. If the port authority is responsible, they too should face consequences. This urgently needs a decisive resolution.
Another major difficulty is that even minor operational matters eventually end up at the administrative ministry. For example, a file for the Power Development Board must go through multiple ministries, wasting time. These issues could be resolved directly by the relevant authority. The situation at Dhaka Airport is alarming. I have personally seen all four Explosive Detection System machines out of order at the same time. During peak season, when 700-800 tonnes of cargo must be handled daily, we are forced to rely on dogs. This is absurd in the twenty-first century.
The solution is reform. Bring in internationally experienced operators for Biman and Hazrat Shahjalal International Airport. Unless we break free from vested interests, progress will remain out of reach.
There seems to be no end to the problems for the garments sector. Chattogram port has become extremely slow. A few years ago, it was not that bad. Nowadays, container handling takes five to six extra days, whereas the global standard is just two. The port is swallowing our lead time. Every single day we are losing competitiveness. Often, we are forced to send goods by air to meet our commitments to buyers, which costs four times more than shipping by sea.
We believe port activities must speed up and reach international standards. Recently, we have tried some shipments through Mongla port. One of our buyers, H&M, has even tested a few containers from there. If Mongla is upgraded with modern cargo-handling equipment, it could ease the pressure on Chattogram.
Despite the slow pace of service at the Chattogram port, the port authority chairman claims to be 'setting record after record,' suggesting the situation is excellent. Honestly, that leaves us confused. Our trucks face seven to ten days of delay at the port. The journey from Dhaka to Chittagong by car normally takes six to seven hours by road, but our trucks take 20 hours to get there. I am quite confused as to why it takes so much time, even though all our trucks are under close monitoring through trackers. As they approach Chittagong, they slow down drastically. The road situation there is dreadful.
Exporters are facing mounting challenges as off-dock depots take buyer nominations beyond their capacity, forcing trucks to wait five to seven days. Exporters are paying higher truck rentals, demurrage charges, and in some cases, resorting to costly air freight when feeder vessels miss their mother ships. Such inefficiency is eroding the country's export competitiveness at a time when we've set a $100 billion export target for the apparel sector.
Chattogram port has long been serving the export-import sector, often operating beyond capacity. However, some problems have recently emerged. The port is a service-oriented institution, not a profit-making one. It has never incurred losses, but suddenly raise charges without any discussion. Why? Similarly, unilateral fee hikes by depots unfairly burden exporters. If charges must increase, there should be proper justification. Foreign operators in port handling should be welcomed. Their efficiency can raise service standards and help local people gain valuable expertise. This will benefit the sector in the long run. Instead of opposing, we should support the move.
Another pressing concern is harassment by customs officials, which causes 80-90 per cent of container delays. In one case, a 200 per cent penalty was imposed vindictively, forcing the importer to move the court seeking an order to have their goods released.
We urgently need to implement the Bay Terminal, expand the Dhaka-Chattogram highway with elevated expressways, and fully operationalise Pangaon, Mongla, and Payra ports to achieve to handle the future export boom.
For modernising the port, the first step is to halt container deliveries from existing facilities and clear the port. For this, a new off-dock is essential. Recently, the CPA Chairman has announced that the port is developing a new off-dock, which is a positive initiative that will keep the port clear.
The Chairman also said they intend to reduce the number of ships at the port. But that would hurt operations. With proper management, 200 ships could be handled instead of 118. Ships could be unloaded in 24 hours instead of 48 hours. A long-standing problem is lack of accountability. Earlier, we appointed contractors ourselves. Now, the port appoints contractors and they are reluctant to resolve ship-related issues efficiently. Appointments should be made through open tenders. Some charges have jumped from Tk 30 to Tk 120. The government should monitor charges. Making the Bay Terminal operational is extremely urgent, facilitating large vessels with 12-metre draughts to enter round the clock. Matarbari also needs a clear operational plan. The shipping licence process must be simplified. Under the existing system, a business will be forced to close if its licence holder dies and the heirs fail an exam.
Bangladesh is spending as much as 16 per cent of its GDP just to move goods from factories to customers. That's far above the global average of 10 per cent. This extra burden is eating away at our trade competitiveness and discouraging investment. Now, 35-54 per cent of these logistics costs come from inefficient transport systems. Besides, our infrastructure is so fragile that even light rain can disrupt highways and terminals. We've discussed these issues enough and now we need action. If we want to push exports to $100 billion, we have a lot to improve.
Despite years of policy dialogue, reforms have moved frustratingly slow. We've identified over 62 regulatory bottlenecks. Many of these don't need massive new investment-they just need better coordination. Right now, we're prioritising multimodal transport infrastructure and logistics hubs. The World Bank has already three billion dollars in ongoing projects for logistics, but completing them has been a big challenge. Our appeal to the government is simple -- execute and complete the projects in time.
If we really want to cut costs and improve logistics performance, we must focus on timely project implementation, multimodal connectivity, digitalisation, and developing logistics-related skills. We need a national logistics council to bring all agencies.
Chittagong Port, to compensate for its performance limitations, forces ships to sail if loading isn't finished within 48 hours. When cargo isn't loaded in time, vessels miss the mother ship and discounts are lost. Empty containers also have to be imported for exports due to low food imports. To cope, we even spend dollars to post-load containers from one vessel to another.
By regulation, operators are liable for damages, yet many refuse responsibility and the port authority often overlooks the issue. Claims to adjust damage costs against our bills slow operations, leaving us to decide whether to hire operators or risk being forced to use them. Over 8,000 containers -- some over 10 years old -- are lying idle at the port due to poor coordination with customs. During auctions, the cost of destruction falls on us, not on customs. Port rules are misinterpreted, and the port has reached its maximum capacity. At this rate, it cannot meet $100 billion export target. Larger vessels and more capacity are essential.
Since 2012, I've followed Bay Terminal planning. Yet in 2025, 12 years later, no infrastructure exists. Despite claims of record efficiency, the reality of performance tells a very different story.
The biggest challenge in the logistics sector is delay at the ports, which affects export-related industries. Port management falls under multiple ministries. Goods are often sent from main depots to private depots without consulting the relevant parties. As a result, when packaging materials or accessories for the RMG sector fail to arrive in time, exports cannot be completed.
Transportation costs are another burden. Even with private carriers, extra rented vehicles are needed, and entering metropolitan areas adds Tk 50 to Tk 500 per truck. Customs gate services cause further problems. After port inspection, trucks are sometimes re-inspected at the gate, adding 2-5 days of delay. A 3-day delay can raise truck rental costs by Tk 150,000-200,000, besides increasing the risk of product damage. Coordination among NBR and relevant authorities is extremely weak.
As I represent American investors, I must ask why they would invest in Bangladesh if they face constant hurdles at customs and ports. Let me give you an example. One of our members imported a server from San Francisco in 2023. It took seven to eight months just to get it released from customs. By the time the port finally released the goods, the costs had gone up to ten times higher than the original deferral charge.
If this is the reality, why would investors put their money here? They want a corruption-free, smooth business environment. That investor could have cleared the server earlier by bribing someone-but he didn't for they follow FCR. Bribery is not an option for them.
Logistics in Bangladesh began in the eighties, yet it is still not fully organised. The real problem is that we don't involve logistics experts in infrastructure projects. We build mega projects like the Padma Bridge or the third terminal, but without logistics planning. That is why these projects fail to serve their full purpose. For example, the Bay Terminal should have been built before Matarbari. Instead, we got Payra Port-a bad investment made just to support a particular company.
Now what we need is reform, proper legal frameworks, closing the logistics knowledge gap, off-dock depots outside Dhaka airport, and an upgraded Kamalapur ICD. These are practical steps to boost efficiency.
We have witnessed major developments at Chittagong Port. When container shipping began, only 106 containers were handled annually. Today, the port handles nearly 4 million TEUs. This shows that, despite limited facilities, officers are working hard and deserve recognition.
But serious bottlenecks remain. To bring cargo out, four separate NOCs are needed from different parties. According to multimodal shipping regulations, delivery should be possible with a single document, as the multimodal operator is liable under both international and Bangladeshi law. Yet this is not being followed.
Two customs-related issues -- NOC issuance and inspection - slows port operations. We have proposed to the Customs Commissioner and the Chairman that these obstacles be cleared within 24 hours. Unless that happens, even a fully operational Chittagong Port cannot function efficiently. Operational costs are also excessive. A standardised policy is essential to regulate these costs. Multi-delivery operations involve three levels of agents -- for loading, handling, and final delivery. Agents are remunerated from this fixed cost. These charges can and should be standardised under national law.
With rapidly growing trade volumes and evolving supply chains, the logistics sector has become both a cornerstone of our economy and an area requiring urgent strategic attention. This discussion aims to create a platform where policymakers, industry leaders, service providers, development partners, and users can come together to exchange insights, identify bottlenecks, and suggest practical reforms. By sharing diverse perspectives, we hope to generate solutions that are not only visionary but also implementable within our national context. Equally important is ensuring that the discussion does not end here. We sincerely hope that policymakers will carefully consider the recommendations shared by our distinguished guests and participants. If acted upon, these ideas can strengthen efficiency, reduce costs, and enable Bangladesh to achieve its ambitious trade and export goals.
Our logistics costs are far higher than international standards. If we compare Bangladesh with Japan or Korea, we'll see we’re far behind them. Even Vietnam has already surpassed us because they undertook necessary reforms.
No matter what type of economies they have - socialism or capitalism - they prioritised business and built competitiveness. However, we continue to neglect our integrated transport system. Bangladesh is lagging in institutional reform. Entrenched vested interests have blocked restructuring. For example, creating a single Ministry of Transport has been avoided. Instead, multiple ministries serve narrow interests. Globally, transport is multimodal.
If we want rapid growth, we must implement large-scale reform. Without genuine reform, Bangladesh will not progress. Polite words won't work-surgical reform is urgently needed.
We have witnessed many challenges in the shipping sector. Addressing them requires constant strategy and coordination. In particular, shipping-related issues are a regular concern. Challenges arising after import cargo arrives at Bangladesh ports are major challenges for us. If these issues are not properly managed, we will face difficulties after the 2026 LDC graduation. Our facilities are not yet at the required level to cope with this.
The jute sector is an extremely promising. However, we, in this sector, often cannot complete operations due to high freight costs. If shipping companies do not offer competitive prices, businesses and the country will suffer. Charcoal is a completely new product. Although our segment is small, among the diversified jute products, charcoal is made from jute sticks and is 100% export-oriented. The biggest challenge in shipping, however, is that not all shipping lines are willing to transport this item.
Our sector is still functioning under an 1884 law. According to that law, if anything is found non-compliant on a ship, the entire ship gets arrested. Similarly, if just one container is found non-compliant, the whole ship gets arrested. That's completely unfair. You end up punishing 1,499 innocent people for the fault of one. In other countries, this doesn't happen. There, only the party in fault is punished.
Another problem is the lack of consultation. When there was a meeting on container shipping, the Bangladesh Container Shipping Association wasn't even invited. That's the situation. In our country, if an officer assigned to a job remains absent, the work just goes on hold. It doesn't automatically pass on to the next officer. Why should it be like that? And another question is why customs is our licensing authority. That responsibility should lie with the Shipping Ministry or the Department of Shipping.
There are around 1,100 freight forward agencies in the country, but not all of them report to us. Out of those, roughly 500 do. Another issue is that, as per legal provisions, export income must be repatriated. But many exporters don't bring the money back, and whenever we ask about it, we don't get a clear answer. In my department, we can resolve your payment complaint in real time, provided you submit the relevant documents with complaints. The problem is that in most cases, we don't get that documents. And if we don't have it, naturally the question arises about whether the complaint is genuine or not. When it comes to multimodal goods passing through, we also face challenges. We don't get shipment details; we get just a simple invoice where only the destination is mentioned.
If we can increase the number of ships at Mongla Port, major brand importers will be able to receive cargo comfortably. If we can operate two ships per week from Mongla, frozen food exporters will also benefit significantly. But the channel is not very wide. Addressing this will require dredging. If the government extends some financial support (low-cost finance), we can develop off-dock there. However, it will take another five to 10 years for this to become fully operational and tap its full potential.
