Bangladesh's logistics policy must become a competitiveness strategy

The National Logistics Policy 2025 marks an important shift by recognising logistics as a national competitiveness agenda rather than merely a transport function. It prioritises multimodal connectivity, digital trade facilitation, private investment and stronger institutional coordination. The challenge now is implementation—making logistics faster, cheaper, safer and more predictable.

Bangladesh's strategic opportunity

Bangladesh occupies a strategic position linking South and Southeast Asia, while offering maritime access for India's north-eastern states and alternative routes for Nepal and Bhutan. Its growing trade reinforces this potential: merchandise trade approached US$110 billion in FY2024–25, while Chattogram Port handled 3.4 million TEUs and 138.2 million tonnes of cargo in 2025. 

Major investments in the Padma Bridge, Chattogram, Mongla, Payra and Matarbari ports, railways, inland waterways and economic zones are strengthening the country's logistics network. 

As Bangladesh diversifies beyond ready-made garments into pharmaceuticals, agro-processing, electronics, leather and other sectors, efficient logistics will become increasingly important. Geography provides the opportunity; connectivity and efficiency will determine whether Bangladesh can convert it into a competitive advantage.

The high cost of inefficiency

Despite infrastructure improvements, Bangladesh's logistics system remains costly. According to the World Bank, logistics costs range between 2 and 33% of industrial sales depending on the sector, with transport accounting for the largest share. Congestion, lengthy customs procedures, fragmented documentation, inadequate warehousing, limited multimodal transport and weak institutional coordination increase the cost and time of moving goods. 

These inefficiencies reduce export competitiveness, raise business costs and ultimately affect consumers. The real test of the National Logistics Policy will therefore be measurable reductions in logistics costs and improvements in customs clearance, port productivity and supply-chain reliability.

The maritime reality: Deep-water access matters

One constraint deserves particular attention: reliable deep-water access. Bangladesh lies within the Ganges-Brahmaputra-Meghna delta, where sediment continuously reshapes river mouths and navigation channels. Maintaining adequate draft at ports such as Mongla and Payra therefore requires continuous dredging, sediment management and hydrographic monitoring—a permanent operational requirement rather than a one-time investment. 

This has commercial consequences. Global shipping increasingly depends on larger vessels to reduce costs through economies of scale. Where adequate draft cannot be guaranteed, cargo may need to pass through regional transhipment hubs before reaching Bangladesh on smaller feeder vessels, adding cost and transit time. Regional experience is instructive. 

Colombo has become South Asia's leading transhipment hub, partly due to its ability to accommodate large container vessels. India is investing heavily in Vizhinjam International Seaport to reduce dependence on foreign transhipment hubs. Pakistan's Gwadar similarly demonstrates the strategic value of deep-water access. Bangladesh cannot change its geography, but it can manage its constraints. 

Chattogram will remain the principal maritime gateway, while Mongla and Payra have important complementary roles. Sustainable dredging and climate-resilient port planning are therefore essential. Matarbari Deep Sea Port is particularly significant because it can improve direct access for larger ocean-going vessels.

Learning from global leaders

Successful logistics hubs combine infrastructure with efficient institutions, technology and predictable regulation. Singapore built its position through efficient customs, digital platforms and world-class port management. Rotterdam integrates its seaport with railways, inland waterways and logistics parks, while Dubai connects Jebel Ali Port with free zones and airports. 

Busan supports South Korea's export-oriented industries and Colombo serves as a major regional transhipment hub. The lesson is simple: geography and infrastructure alone are not enough. Institutional coordination, technology, private investment and consistent execution turn connectivity into competitiveness.

From policy to performance: Five priorities

First, establish an integrated delivery mechanism. A high-level National Logistics Delivery Council, involving government and the private sector, could monitor implementation, resolve inter-agency bottlenecks and ensure accountability.

Second, accelerate digital trade facilitation. The Bangladesh National Single Window, paperless customs, electronic documentation and technology-based risk assessment should reduce clearance times, costs and uncertainty.

Third, strengthen multimodal connectivity. Roads, railways, waterways, ports, airports and economic zones should operate as an integrated system, with greater use of rail and inland waterways for freight.

Fourth, encourage private investment and innovation. Modern warehousing, cold chains, logistics parks, inland container facilities and digital supply-chain services require predictable policies and supportive regulation.

Fifth, introduce measurable national targets. An annual National Logistics Performance Report should track logistics costs, customs clearance, container dwell time, port productivity, rail freight utilisation and supply-chain reliability.

The economic dividend

Efficient logistics would strengthen exports, attract investment and support industrial diversification. Regional connectivity could also create substantial opportunities. India's north-eastern states could gain shorter access to maritime trade, while Nepal and Bhutan could diversify their trade routes. 

Bangladesh, in turn, could earn revenue from ports, transport, warehousing, freight forwarding and related services. Regional transit should therefore be viewed as a commercially beneficial service rather than merely a political issue. Logistics itself can also become a growth industry, generating skilled employment in shipping, warehousing, freight forwarding, digital platforms, insurance and trade finance.

The opportunity before Bangladesh

Bangladesh has the geography, infrastructure and policy foundation to become an important regional logistics hub. The National Logistics Policy provides the roadmap, while Matarbari can strengthen the country's maritime capability. The decisive challenge is execution. 

If Bangladesh can convert geographic advantage into dependable connectivity and policy commitments into measurable performance, it can move beyond being a transport corridor to become a competitive logistics gateway linking South Asia with the wider Indo-Pacific economy.

Md Nazrul Islam is a former executive chairman of BEPZA, former executive member (Planning and Development) at BEZA, a retired Major General of the Bangladesh Army, and a PhD researcher on technology, workforce transformation, and industrial competitiveness.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.