The necessity of a national logistics policy in Bangladesh
The efficiency of the import and export processes is determined by the logistics policy of a State. With a coherent system among the logistics, import and export sectors, dominating the product delivery process, will consistently increase the turn-up profit for a State.
Logistics generally means the process of transportation and distribution of goods from the initial production level to the final destination, i.e., consumers. A national logistics policy is the directive that dictates how the logistics process, such as infrastructure development, customs, transportation, and trade policy of a State, will efficiently operate.
Mitigating crucial bottlenecks is a prime concern of a logistics policy. Since the bottlenecks occur at particular places or jurisdictions, such as port authorities and customs clearance, the logistics policy can detect and mitigate the complications, resulting in enhanced logistics performance in and through the process.
According to the experts, Bangladesh is losing 20% of its export potential owing to inadequate logistical services. The absence of effective logistical legislation is causing the shipping industry to incur higher costs. The rate of delivery of products falls short of expectations, and a comprehensive logistics system would vastly increase the conveyance of goods.
American Chamber of Commerce (AmCham) along with other interested groups indicated that Bangladesh's export development is hindered by the unrecognised logistics industry. The group urged the formation of a national logistics strategy to minimise the sector's complexity and tackle its issues. Presently, Bangladesh lags behind India and Pakistan in the logistics industry index. Bangladesh Freight Forwarders Association (BAFFA) also mentioned that the freight forwarding and logistics industry lacks a solid logistics strategy; thus, the congestion in the Chattogram Port leads to loss of time. In addition, the experts emphasise the importance of transportation via the river routes of Bangladesh which has not yet used the full potential of river routes. However, the addressable issue may be remedied by implementing an overarching logistics program or scheme. With the enactment of a national logistics policy, a State can introduce either short-term or long-term logistics priorities and objectives, as well as the critical measures that are deemed required to attain these objectives. For example, China and Malaysia have achieved coherence in their national logistics policies regarding logistics sector management and addressed the global environment by implementing green logistics.
Another illustration is Indian National Logistics Policy, 2020. The Indian government has focused on several aspects of the logistics sector, such as commodity-specific interventions, data and logistic analysis centers, and developing new methods to improve logistics. The main goal of the Indian national logistics policy is to create an ecosystem to accelerate economic growth and facilitate trade. There are key objectives of the National Logistics Policy, 2020 (India), such as creating a 'single point' system for all logistics and trade facilities; making a balance between logistics cost and export growth; creating an e-marketplace and digitalisation of supply-chain processes; and strengthening security in cyberspace.
The Indian government has allocated funds to establish 'multi-modal logistics parks,' which will reduce freight costs, time, pollution, and traffic congestion. The Indian government intends to cut carbon emissions to zero by 2070. The logistics plan includes the promotion of carbon alternative fuels in transportation. Additionally, reducing industrial waste and environmental pollution while maintaining a strong manufacturing sector to increase the Indian GDP is one of the targets of the logistics policy. The government is emphasising local technology investment and assisting firms in adopting technology in the logistics sector.
A national logistics policy addresses several aspects of the logistics process, including infrastructure development, modernisation, monitoring, information and communication technology (ICT), human capacity, harmonisation and standardisation, trade and transportation facilitation, internationalisation, environment, and a functioning logistic research center.
For instance, the Dhaka-Chittagong Highway is one way which creates congestion due to poor road conditions. Multimodal usage of the hinterland transport (HT) facilities between Dhaka and Chittagong in Bangladesh and increasing the use of inland waterway transport (IWT) and railway may alleviate congestion. In addition, with improvement in infrastructure and smoother transactions between Pangaon ICT and Chittagong port, the port service will increase. Furthermore, by reducing the border- crossing barrier complications, Indian northeastern cargo shipments may reach Bangladesh, thereby increasing export possibilities.
Moreover, the use of a geographic information system (GIS) database to organise, to analyse, and to display the logistics data and to encompass human users and support personnel, processes and workflows, related ideas and methodologies, and institutions concerning the logistics sector, can also be of help. Additionally, numerous national logistics policies recognise that logistics is an international sector and emphasise the need for a national logistics strategy to enhance the international potential of the domestic logistics industry.
Another illustration is the use of logistics system assessment (LSA) which analyses the entire system's strengths and weaknesses, presenting the result of the assessment, reducing or eliminating them, as well as proposing an implementation plan with specific steps based on the given recommendations. Furthermore, the use of logistics management information systems to collect data and the use of Self-Balancing Reports to calculate and automate complex numeric reports and equations.
Lack of legislation regarding logistics hampers the overall EXIM process and creates bottlenecks not only in shipping but also in the product delivery process. As the world slowly recovers from the COVID-19 pandemic, it is critical to accelerate exports and allow manufacturers to enjoy a hassle-free EXIM process. Many countries have legislation and some are taking initiation to enact legislation concerning logistics. Bangladesh can also adopt a national logistics policy for the betterment of the stakeholders and to mitigate the loss incurred due to lack of proper logistic arrangements in EXIM process as well as safeguard the national economy from ongoing inflation.
The writers are lawyers of MCLaw Services, being the Head of the Chambers and Research Associate of MCLaw Services, respectively.