Efficient logistics key to boosting local trade, global competitiveness | The Daily Star
12:00 AM, November 25, 2018 / LAST MODIFIED: 12:06 AM, November 25, 2018

Efficient logistics key to boosting local trade, global competitiveness

Bangladesh should put in place efficient transport and trade logistics not only to ensure smooth transportation of goods but also to boost the country's competitiveness globally, analysts said.

 “We have to ensure seamless connectivity,” said Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD).

ASM Mainuddin Monem, deputy managing director of Abdul Monem Limited, the country's leading construction firm, said unpredictable logistics is very costly.

“Because of the unpredictability, you can't do real planning. Bangladesh is a small country but it is densely populated. We have many other challenges as well, so we have to go for a multimodal transport system.”

In the latest Global Competitiveness Index, Bangladesh scored 34.3 out of 100 in the road connectivity index with 100 being the best and zero being the worst.

When it comes to the quality of roads, the score was 3.1 on a scale of 1-7 with one being the worst and seven being the best. The country scored 3.2 in the efficiency of train services sub-index.

Rahman of the CPD said logistics infrastructures have become an important element of the country's competitiveness as they are interlinked with the ease of doing business.

When it comes to trade logistics, businesses face delay at the borders because of a lack of a single window and an electronic data exchange and a huge amount of time is spent just on documentation.

Globally, three things are needed for competitiveness: price competitiveness, quality, and lead-time, according to the trade expert.

In case of lead-time, Bangladesh is falling behind. “This is not only about export competitiveness; because of weak trade logistics, imports get delayed and are more costly. Ultimately, it affects the consumers.”

Rahman said producers, exporters and consumers pay a price because of weak trade logistics.

He said competitiveness at the enterprise level alone will not yield any results and there has to be competitiveness in the entire value chain.

Rahman said transport corridors within the country have to be developed further and run efficiently so that delays don't take place and costs don't escalate.

Mainuddin said the biggest challenge for Bangladesh is that a multimodal transport system has not yet been developed in the country in such a way.

Because of the lack of a multimodal transport system, fuel is being burnt by slow-moving vehicles on the roads unnecessarily, he said.

The transport system is still dependent on roads and this dependency is very risky. One mode of transport will not solve the problem, he said.

Mainuddin said that on the Dhaka-Chittagong highway, the biggest obstacle is the container-laden trucks, which account for 90 percent of all the traffic.

“If we can transport them through rivers, it will give us a huge advantage. But this is not the case in Bangladesh.”

“We have to give importance to the river routes,” said the industrialist, adding that ultimately, the rail, roads, and rivers have to be focused.

SK Masadul Alam Masud, a former chairman of the Bangladesh Auto Re-rolling and Steel Mills Association, said every month 2 lakh to 3 lakh tonnes of scraps are brought to steel mills in Shayampur, Narayanganj, Demra, and Kanchpur using the road network.

If the Pangaon Inland Container Terminal port in Keraniganj is made fully functional, those scraps can be brought through the river network which will cost much less in terms of freight charges and ease traffic congestion on roads, he said.

He said Gazipur-based industries can also use the Pangaon port for their import-export activities instead of using the congested highway.

Masud Khan, chief executive officer of Crown Cement Group, said cement companies are facing a number of challenges in delivering products across the country.

The challenges include congested roads that increase the costs of transportation; bazars on highways and regional highways impeding traffic and increasing fuel costs; poor road conditions leading to increased fuel consumption and maintenance costs; and poor quality of fuel which increases fuel consumption and reduces engine life.

The challenges can be resolved by improving road conditions and proper enforcement, said Khan.

He said ready-mix concrete (RMC) has very short duration; normally, the concrete has to be delivered within two hours of production.

 “Any additional time has to be covered by admixtures that are expensive. If there are delays, which is what happens often, customers refuse to take delivery and companies take the hit for the wastage,” Khan said.

Md Tarek Uddin, a professor of the civil and environmental engineering department of the Islamic University of Technology, said quality of concrete is very important for any infrastructure.

 “If we can't ensure the quality, we will not get the required strength and durability.”

Prof Tarek said sustainability has become an issue when it comes to building a structure. “We have to ensure that they are durable and last long.”

He said quality of concrete is an issue if Bangladesh wants to make the most of the blue economy because the environment in Dhaka city and that of other areas in the coastal belts is not the same.

For example, in Khulna, where there is a problem with salinity, many structures get damaged faster than those in non-coastal areas, he said.

Prof Tarek recommended taking inputs from material engineers when structural engineers design a project.

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