Weak logistics, high business costs hurting Bangladesh’s export competitiveness: Experts

Economists and business leaders have said weak logistics infrastructure and high business costs are reducing Bangladesh’s trade competitiveness, warning that export growth will remain constrained without reforms in ports, transport and supply chain management.

They said reducing logistics costs by 25% could increase exports by 20%, while a 1% reduction in freight transport costs could boost exports by 7.4%.

The observations came at a roundtable titled “Developing an Integrated Port and Logistics Sector for Trade-Dependent Bangladesh”, organised by the Dhaka Chamber of Commerce and Industry (DCCI) in Dhaka today (9 May).

Speaking at the event, DCCI Senior Vice-President Razeev H Chowdhury said infrastructural limitations and lack of institutional coordination in the logistics sector are seriously hindering the country’s export potential, causing Bangladesh to fall behind competing nations.

He said lengthy cargo clearance procedures at ports, slow transportation through road and rail networks, and limited modern cold-chain logistics facilities have made the overall supply chain system costly and inefficient.

To improve the investment climate and overall economy, he stressed the need for paperless automated systems at ports, public-private partnership-based infrastructure development, and expanded investment in modern cold-chain logistics.

Presenting the keynote paper, Policy Exchange Bangladesh Chairman M Masrur Reaz said manufacturing contributes around 40% to Bangladesh’s GDP, higher than many neighbouring countries, but attracting both local and foreign investment remains crucial for further expansion.

He noted that although Bangladesh’s exports have undergone significant transformation over the past four decades, export earnings are still concentrated in a limited number of products and markets, making diversification essential for sustainable economic growth.

Masrur Reaz also emphasised improving trade-related capabilities, infrastructure development and policy reforms. He identified weak logistics structures and high operational costs as key barriers to creating a trade-friendly environment.

He further said effective implementation of the national logistics policy, engagement of both international-standard foreign operators and domestic private firms in port management, reducing container clearance time at Chattogram Port, and removing policy bottlenecks are essential for developing the logistics sector.

Bangladesh Institute of Management Director General Md Salim Ullah, who attended as special guest, said the country remains significantly behind in ensuring efficient management of integrated ports and logistics services, which continues to increase business costs.

He called for coordinated efforts among all stakeholders to modernise the sector.

Additional Secretary (Administration and Planning) of Chittagong Port Authority Md Habibur Rahman said there is limited scope for further expansion of the Dhaka-Chattogram highway, making rail connectivity the most viable solution for faster and cheaper cargo transportation.

He also proposed involving the private sector in operating at least one of the country’s seaports, arguing that competition would improve service quality and potentially reduce existing tariffs.

Professor Md Shamsul Hoque of the Department of Civil Engineering at Bangladesh University of Engineering and Technology said unrealistic development planning has prevented Bangladesh from achieving desired outcomes, particularly in transport infrastructure.

He stressed that communication infrastructure must be integrated and coordinated to deliver positive economic impacts.

Managing Director of Shahriar Steel Mills Ltd SK Masadul Alam Masud said the absence of scanner machines at the Pangaon Inland Container Terminal discourages businesses from using the port.

He also noted that inadequate inland waterway infrastructure has increased industrial transportation costs instead of reducing them.

World Bank Senior Transport Specialist Nusrat Nahid Babi said customs clearance procedures in Bangladesh are yet to be sufficiently simplified and modernised, especially at land ports where digital systems remain absent. As a result, delays in cargo clearance continue to raise business costs.

ADB Senior Project Officer Humayun Kabir said the Asian Development Bank is working on implementing the Dhirashram ICD container depot and a multimodal logistics hub project.

He also stressed the importance of ensuring digital systems across all stages of logistics services.

Among others, Infrastructure Investment Facilitation Company Managing Director Md Moniruzzaman and representatives from logistics and business sectors also participated in the discussion.