Sustainable and optimized logistics system can lower trading cost and help countries compete globally; enhancing economic growth
The global economy rests on our ability to move things around. Our ability to create things based on inputs sourced from all across the world and then supply finished products to consumers within the right amount of time.
This massive ecosystem of moving goods and materials is enabled by the logistics sector which consists of trucking, railways, shipping and everything else in-between.
Sustainable and optimized logistics system can lower trading cost and help countries compete globally; enhancing economic growth.
But, according to the global Logistics Performance Index of 2018, Bangladesh was way behind India and Sri Lanka, ranking in at 100th; with the aforementioned ranking in at 44th and 94th consecutively, among 160 countries.
And the unprecedented pandemic, further hindered the already ailing sector that needed substantial transformation.
As early as April, just following the lockdown, the Bangladesh Freight Forwarders Association (BAFFA) and the Bangladesh Truck and Covered Van Owners Association voiced the concerns of the business operations of the sector, coming to a halt.(Source : Daily Star)
However, even though the landscape for these companies drastically changed, the future for these companies looks very interesting.
Well one word; Digitization!
A successful integration process between the logistics and the information technology can confer a competitive advantage upon any distribution operations.
Through digital platforms.
More significantly, digital platforms will become increasingly important in the logistics industry, enabling a healthy logistic ecosystem.In fact, we do not have to look beyond the border for one such precedent.
Goods In Motion (GIM), one such digitalized logistic platform that has already set its footprint in 61 districts, has been facilitating thousands of trips every month for a wide range of customers; from development projects to giant corporates like Lafarge, Shah Cement, Seven Rings Cement, Royal Cement, BEOL, ACI, Runner, AbulKhair among others.
Raising an initial investment of USD 2 million from the angel investors like Aziz Group (RMG and chemical behemoth), Galaxy Group (which touches 22 percent of air and 12% of sea freight respectively) and overseas sources, Dhaka-based logistics app GIM (Goods in Motion) has already created significant values in the Goods transportation market of Bangladesh.
Comprised of highly experienced academicians from BUET, NRB tech leaders from USA, local business behemoths like Galaxy Bangladesh Group and Aziz group, the app within a span of 6 months, have been registered more than 11,000 trucks and 6000 drivers while reaching the milestone of 90,000-ton capacity.
Furthermore, anyone having truck with valid document and appropriate driving license can take a trip from GIM. Apart from access to trips, resolving cash flow and insurance issues are also underway through bringing in banks, financial institutions and insurance service providers in the ecosystem
Logistics has introduced digital innovations at a slower pace than some other industries. New entrants of such kind offering innovative digital platforms will help reshape the local logistic scenario.
Since Bangladesh is at the critical juncture of inclusive trade and economic development momentum, the demand for a bespoke logistics facility is mounting.Still being largely an informal sector, logistics for Bangladesh couldimprove its eco-system significantly through digitization.
According to World Bank’s report, 17 percent decrease in logistics cost will increase Bangladesh’s RMG (readymade garments) export by 7.4 percent or almost USD 4 billion. Innovation in technology could accelerate the improvement process in logistics dramatically.
Besides, reforming the national logistic development mechanism is a must for developing countries characterized by low logistics performance and unreliable supply chains.
And let’s not forget, sustainable and optimized logistic ecosystem can help us accomplish Sustainable Development Goals (SDGs).