Govt prepares National Logistics Policy 2025 to boost trade, investment capacity

In a bid to transform Bangladesh into a regional logistics hub by 2050, the interim government has formulated the National Logistics Policy 2025 to make the supply of goods and services at home and abroad faster and more cost-effective.

The policy, prepared by the Chief Adviser's Office, will be presented tomorrow (6 November) at a meeting of the Advisory Council Committee for approval. In April last year, a logistics policy was also approved by the previous Awami League government, however, the interim government has scrapped that version and drafted a new one.

According to the draft, its main objective is to strengthen Bangladesh's trade and investment capacity while addressing the challenges arising from its post-LDC (least developed country) graduation.

After Bangladesh's graduation from the Least Developed Country (LDC) category, which is scheduled for 24 November 2026, the country will gradually lose tariff-free and quota-free access to international markets. This will increase the prices of Bangladeshi products abroad. 
The new logistics policy is expected to help the export sector strengthen its competitiveness and adjust to higher costs and other post-graduation challenges.

Improving transport, warehousing, connectivity

The National Logistics Policy 2025 seeks to ensure efficient production, collection, storage, transport, shipment, clearance and distribution of goods in less time and at lower cost.

To achieve this, the government plans to upgrade infrastructure for roads, railways, bridges, inland waterways, seaports, airports and toll systems.

The draft states that all economic zones, industrial areas, airports, seaports, land ports, warehouses, inland container depots (ICDs) and air freight stations will be connected through the national highway network. Cross-border economic corridors will be identified and linked with domestic road networks. A traffic information system will also be introduced to help road users receive real-time updates.

The policy also proposes enhancing the rail network's freight capacity and coverage. All major economic and industrial areas, ports and warehouses will be linked to the railway network. 

Moreover, to increase the average speed of trains, all metre-gauge railway lines across the country will gradually be converted into broad-gauge or dual-gauge lines.

For waterways, the plan includes year-round navigability through dredging and the construction of suitable vessels, alongside the modernisation of river and seaport infrastructure.

In air transport, specialised cargo services will be launched and new air cargo terminals established to increase air freight capacity.

According to Bangladesh's Perspective Plan 2021-2041, in 2018, about 77% of goods were transported by road, 16% by waterways, 6% by rail, and 1% by other means. 

With the country's steady economic progress, passenger traffic, freight traffic, port container movement, and seaborne cargo traffic are expected to grow several times in the coming years – making the development of the logistics sector crucial for Bangladesh.

A 2020 World Bank report, "Moving Forward: Connectivity and Logistics to Sustain Bangladesh's Success", found logistics costs in Bangladesh ranged from 4.5% to 48% of product value, far higher than those in comparable trading partners and competitors.

The report suggested that moderate reforms in selected logistics areas could increase national export earnings by 19%. A mere 1% reduction in logistics costs could raise export demand by 7.4%.

Enhancing competitiveness

Following LDC graduation, Bangladesh will lose several international trade preferences – such as tariff and quota exemptions, GSP benefits, flexible rules of origin, and intellectual property waivers. The country will also face new obligations under World Trade Organization (WTO) agreements and reduced special and differential treatment (S&DT) privileges.

In addition, the special and differential treatment (S&DT) benefits that Bangladesh currently enjoys under various World Trade Organization (WTO) agreements will gradually diminish, while the country will also face several new obligations in the post-LDC graduation phase.

These changes are likely to raise trade and investment costs, increasing export prices in destination countries. In this context, improving logistics systems will be crucial to offset these costs and maintain the competitiveness of Bangladeshi products and services in global markets.

Business Initiative Leading Development (BUILD), a joint platform of major business chambers, has long been advocating for logistics sector reform. BUILD works to improve the business environment through research, consultation and advocacy to support private-sector-led economic growth.

BUILD CEO Ferdaus Ara Begum told The Business Standard that substantial private investment is needed in Bangladesh's logistics sector. "The new policy makes it clear that the government recognises the importance of logistics and has outlined where improvements are needed. This clarity will encourage private investors to come forward," she said.

Noting that nine ministries and 19 government agencies are directly involved in logistics management, Ferdaus Ara said, "Under the policy, these ministries and agencies will announce implementation plans with specific timelines. Existing master plans in various sectors will be aligned with the logistics policy," she said.

A special monitoring cell will be established under the Chief Adviser's Office to track the progress of all related initiatives. "Such measures will help build investor confidence in the government's commitment to logistics reform," she said.