Monday, July 27, 2020

Logistics Business Prospectus in Bangladesh

The local logistics sector, particularly the transport service, is continuing to grow significantly, keeping pace with the rapid expansion of trade and economic activities in the country. This sector has been playing a crucial role in facilitating the growth of every sector of the country’s economy including industrialization, agriculture, infrastructure, and trade, and commercial activities. Recently, around 150,000 covered vans, trucks, pickups, and prime mover are engaged across the country for transportation of goods including those of export-import items, construction materials, agro-produce, industrial products, and essential items. The numbers of covered vans, trucks, pickups, and prime movers are thus increasing by leaps and bounds as these are the only means of inland transport for ensuring smooth operation related to manufacturing and goods movement. Every day about 90 percent of vehicles constantly carry freights across the country and a small number of these remain stuck due to mechanical or other problems. The fare is not fixed; it is determined through negotiation and it varies from time to time. The average fare of a truck running from Dhaka to Chittagong is Tk 12,000 to Tk 15,000. Around 75 percent of their trips are made for the RMG (readymade garment) sector and thus transport service is constantly playing a crucial role to ensure a competitive edge for the sector. The main highways, especially Dhaka-Chittagong, Dhaka-Mymensingh and Dhaka-Tangail, through which RMG products and the raw materials are transported from factories to the port, are being widened (from two lanes to four lanes) facilitating the transport sector to grow.

However, sometimes owners of the vehicles often face various obstacles including extortion, robbery of vehicles, and harassments by traffic police and political groups especially at different points of the highway. Besides, they also face problems in parking as space is scarce at different parking points where they also have to confront harassment. They often fall victim to forced payment of tolls at many points and sometimes driver and helper of the vehicles are wounded due to attack of robbers. There is none to look after the matter. Even in the name of checking documents highway police claim illegal money though they have valid documents. Growth of the transport sector there has been importing of different types of vehicles which have marked a significant rise over the years; most of such vehicles are imported from India. On the other hand, a significant number of age-old trucks and oil tankers are also plying the roads posing a threat to accidents and causing increased air pollution.

However, Bangladesh's transport and logistics sectors offer immense opportunities for investors, as the country is found most wanting in the area. Given the country's growth forecasts, there is huge scope for investments in infrastructure. A modern multimodal transport system is a must to improve Bangladesh's competitiveness in the global economy and to increase access to goods at reasonable prices. The upgrading of the logistics workforce and technology systems is also needed for ensuring that the transport system is scalable and sustainable. In particular, the road and rail freight transportation companies can set up partnerships with internal shipping lines or logistics providers to increase trade with multinational companies. New modes of transport such as barge services for transporting containers between Chittagong and Dhaka instead of trucking by the road can also help improve logistics. Improvements in ports, road, rail, and air services are all essential for a country that is in the midst of historic growth. Streamlining of government procedures is also needed. Bangladesh specifically needs improvement in customs, infrastructure, the competence of logistics service providers, and tracking and tracing.

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