Enhancing Bangladesh's Logistics Sector
for Sustainable Economic Growth
TRW Law Firm's comprehensive analysis of Bangladesh's logistics landscape, legal challenges, and strategic opportunities
Bangladesh's Economic Transformation
From Struggle to Strength: Over Five Decades of Growth
Economic Indicators
| Indicator | 1971 | 2024 |
|---|---|---|
| GDP Size | $9 Billion | $450 Billion |
| Per Capita Income | $137 | $2,738 |
| Forex Reserve | Nil | $20.5 Billion |
Growth Metrics
Future Projections
Development Targets (Perspective Plan 2041)
Export-led Growth Pathway
A Critical Lever for Bangladesh's Economy
Key Growth Statistics
Export Growth by Decade
Export Impact Analysis
Export earnings of manufactured commodities contributed to 10.1% increase of FOREX reserve in the same period.
Export earnings serve as the backbone of economic stability, vital for paying essential imports and increasing ore reserves.
Transition from Jute to RMG
Transformation of Bangladesh's Export Composition (1980-2024)
Historical Transition
Top 3 Manufactured Products Concentration
| Fiscal Year | RMG | Leather | Home Textiles |
|---|---|---|---|
| FY24 | 81.3% | 2.34% | 1.91% |
| FY23 | 82.2% | 2.53% | 2.35% |
| FY22 | 81.8% | 2.39% | 3.11% |
| FY21 | 81.2% | 2.43% | 2.92% |
| FY20 | 83.0% | 2.37% | 2.25% |
RMG Export Destination Concentration (FY24)
Economic Diversification Imperative
Product and Market Diversification Essential to Address Future Vulnerabilities
Current Export Basket
Post-LDC Graduation Tariff Rates
| Countries | Current | Post Graduation |
|---|---|---|
| Canada | 0% | 16.2% |
| European Union | 0% | 11.6% |
| United Kingdom | 0% | 0% but stringent ROO |
| India | 0% | 22.7% |
| Japan | 0% | 9.0% |
ROO = Rules of Origin
⚠️ Risk Assessment
An estimate of 2018 states that removal of LDC preferences could impose 6.7% additional tariffs on Bangladesh, causing a potential export loss of around 14%
Source: Economic Relations Division (ERD)
Global Competitiveness Measures
Significant Room for Improvement
Global Competitiveness Index (GCI)
Global Innovation Index (GII) 2024
Global Skills Report 2024
Total Factor Productivity (TFP) Changes (1970-2022)
Over the past half-century, TFP change was minimal in Bangladesh (0.72). This implies that Bangladesh's economic growth has relied more on input accumulation than on productivity gains or innovation.
Trade Facilitation for Competitiveness
Critical Driver of Trade Competitiveness
Trade Facilitation Scope
Trade Facilitation Agreement Benefits
Trade Facilitation Indicators: Bangladesh vs Vietnam
*The TFIs take values from 0 to 2, where 2 designates the best performance that can be achieved.
Vietnam Success Story
Logistics Performance Index (LPI)
Bangladesh Lags Behind Peers in Trade Logistics
LPI Overall Rank
LPI Detailed Breakdown
| Country | Customs | Infrastructure | Shipments | Competence | Timeliness | Tracking |
|---|---|---|---|---|---|---|
| India | 47 | 47 | 22 | 38 | 35 | 41 |
| Vietnam | 43 | 47 | 38 | 53 | 59 | 41 |
| Bangladesh | 101 | 108 | 91 | 81 | 87 | 105 |
Trading Across Borders
High Costs and Inefficiency for Bangladesh
Time to Export (Hours)
Cost to Export (USD)
Time to Import (Hours)
Cost to Import (USD)
Agility Emerging Markets Logistics Index (2022)
Bangladesh lags in digital readiness and business fundamentals
Overall Rank
Detailed Breakdown
| Country | Domestic Logistics | International Logistics | Business Fundamentals | Digital Readiness |
|---|---|---|---|---|
| India | 8.04 | 7.45 | 5.94 | 7.61 |
| Vietnam | 5.02 | 6.03 | 5.61 | 5.43 |
| Bangladesh | 5.02 | 4.48 | 3.53 | 4.63 |
Logistics Costs & Trucking Rates
Weak Logistics System Leading to Higher Costs
High Logistics Costs
In Bangladesh, private logistics costs are high across sectors, ranging from 4.5% of sales in leather footwear to 47.9% in horticulture.
Trucking Rates
Average trucking rates in per ton per kilometer range from $0.06 for a 16-ton truck to $0.12 for a trailer. Congestion is one of the major contributors in doubling these costs.
The average rate for a commonly used 7-ton truck is $0.095—higher than in many developing and developed countries.
Infrastructure Progress
Important Steps to Enhance Logistics Capacity
Dhaka-Chittagong Railway
The Dhaka-Chittagong railway line is now double-tracked, boosting regional trade and increasing train capacity from 23 to 72 pairs per day.
Sylhet Cargo Flight
Launch of cargo flights from Sylhet's Osmani International Airport will increase export/import through the region and reduce dependency on Dhaka.
Bhomra e-Port
The Bhomra e-Port management system will enhance efficiency, reduce delays, and promote seamless trade.
Benapole Cargo Terminal
The new cargo vehicle terminal at Benapole Port can accommodate 1,200-1,500 trucks, reducing congestion and delays.
Pipeline Projects
Supporting Bangladesh's Logistics Development
Matarbari Deep Sea Port
Targeted for completion in 2029, it will minimize transportation costs by 57% and reduce delivery time by 60%.
Dhaka Bypass Expressway
Tentative completion in July 2025, it will cut Gazipur-Madanpur travel time from 2 hours to just 30 minutes.
Bay Terminal
Targeted for completion in June 2031, it will increase Chittagong Port's capacity by 6 times.
Third Terminal at HSIA
Expected to open in early 2026, it will double cargo handling capacity and increase passenger handling to 2.4 crore annually.
National Logistics Policy
Important Directions for Coordinated Efforts
Policy Objectives
- Ensure gradual reduction in delay and cost
- Ensure smooth, seamless and effective logistics eco-system
- Establish multimodal Logistics
- Build skilled human resources
- Pull, retain and expand local and foreign investments
- Ensuring gradual improvement in various indicators
Expected Outcomes
- Economic Growth
- Higher trade
- Enhance Industrialization
Tahmidur Rahman Remura Wahid
Bangladesh's premier international law firm specializing in logistics, transportation, and trade law
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