Logistics, freight thrive on rising trade
The logistics and freight industries in Bangladesh have been thriving for years in line with the steady growth of exports and imports, according to sector players.
Currently, about 1,000 local and 20 international logistics and freight forwarding companies are providing necessary support to the export and import sector in Bangladesh.
The country imported goods worth about $52.84 billion in fiscal 2017-18 and exported products worth about $36.67 billion, according to data from the Bangladesh Bank.
“The industry is growing in line with the export and import growth,” said Amirrul Islam Chowdhury Mizan, senior vice-president of the Bangladesh Freight Forwarders Association (BAFFA).
The total business roughly reached $1.5 billion in 2017, he said. The industry has grown amidst the absence of quality infrastructure and use of substandard equipment for the last 30 years, according to Mizan, also the managing director of Transworld Logistics & Distribution.
Foreign companies mostly open joint ventures with local companies and this collaboration built the foundation for further accumulation of domestic logistical expertise.
Logistics companies provide transport services of freight through sea, road and air ways. The rail transport of freight for exports and imports is yet to be introduced in Bangladesh.
Rail and road freights are major segments for inland services, Mizan said. Shipping freight's share in the export and import business in Bangladesh stands at 80 percent, while that of air and road is 20 percent.
Logistic companies carry out all responsibilities, including loading and unloading until goods reach warehouses.
In Bangladesh, the industry came into being in 1991-92 without any experience and suffered in the beginning because of a lack of skilled workforce and communication skills. There was no guideline and policy regarding the industry and even government officials, exporters and importers had no basic idea on how to operate the industry, Mizan said.
“The industry faced a lot of hassles to run businesses but went on to achieve global standards. The entrepreneurs developed their business just using common sense as they had no orientation about logistics support or freight trading.”
Since the annual export and import trade volume reached $100 billion, the sector has a huge potential to improve.
The industry directly generated about 40,000 jobs in the last 30 years. “Still, there is a lack of skilled manpower,” he said.
According to the Agility Emerging Markets Logistics Index (AEMLI) 2018 of Kuwait-based Agility Global Integrated Logistics, Bangladesh recorded the third-highest improvement in the index score.
It made gains across all three facets of the index but the country's most notable gains were in the market size and growth and compatibility sub-indices.
The report also said Bangladesh showed the biggest improvement in infrastructure, having manufacturing ambitions beyond the apparel sector. The country wants to grow its pharmaceutical, steel, shipbuilding and food processing industries.
According to the AEMLI, Bangladesh is considered one of the 45 major emerging markets in the world.
Entrepreneurs provided support to exporters and importers including that on shipping, packaging and distributing, said Mahbubul Anam, president of the BAFFA and managing director of Cross Freight.
He put emphasis on the necessity of communication skills to run the industry and find business.
However, Mohammed Nasir, vice-president for finance at the Bangladesh Garment Manufacturers and Exporters Association, said the freight forwarding industry tried to create pressure on those availing the services as there was no policy or guideline.
The government should address the issue to maintain global standards for freight forwarding in the greater interest of the export market, he said.
“Of course, the sector is booming in line with the country's growing economy,” he said.