Experts on Wednesday said that Bangladesh needed to address exporters' high logistics costs to offset post-LDC graduation tariffs in its global export destinations.
The country for its common exports to the major destination countries would face 8.6% to 17% tariffs four years later as soon as it graduates from the LDC status, they also said, adding that halving its highest-among-peers logistics costs across industries might help to retain the country's export competitiveness.
The two-day workshop titled "Formulating National Logistics Industry Development Policy for Bangladesh: Experience from Global Good Practices" was jointly organized by the Ministry of Industries, the World Bank and the Business Initiative Leading Development (BUILD), a top public-private dialogue platform by some top chambers of commerce and industries of the country.
Due to inadequate port, road, rail, and inland water transportation infrastructure amid continuous growth in economic activities and international trade, Bangladeshi exporters need an abnormal high lead time to ship their goods abroad, entrepreneur Syed Nasim Manzur, president of the Leather Goods and Footwear Manufacturers and Exports Association of Bangladesh said in the event.
For example, he said, having orders from a European buyer, a Bangladeshi exporter needs at least 108 days -- 35 days for imports of raw material, 30 days for production and 43 days for sending products to Germany's Hamburg port, while India and Vietnam need only 81 and 64 days, respectively, reflecting their exporters speed to market.
Manzur, the managing director of the country's pioneering footwear exporter Apex, also said both Bangladesh and India need 20 days to receive a Chinese shipment by sea, which is 7 days for Vietnam and Cambodia.
Economist M Mashrur Reaz, chairman of the Policy Exchange of Bangladesh, in his keynote, showed how much the logistics issues increase Bangladeshi companies' costs.
Except for leather goods and apparel no industry spends less than 10% of their total revenue for logistics, while trucking cost here is one of the highest among peers, Reaz cited from studies.
Considering horticulture products' logistics cost shooting to 48%, the average logistics spending is somewhere around 17%, while the extra lead time only adds to the costs.
Experts, industry professionals and business leaders emphasized combined steps for a significant improvement in all the indices without which exporters' low competitiveness would hurt the economy, while local market logistics costs also need to be reduced.
Proper infrastructures for sea, land and airports, integrated and automated network for efficient services at every logistics point and removing all supply chain bottlenecks were at the top of their recommendation lists.
They emphasized the under-process national policy for modern logistics in the country to be accommodative for enough foreign direct investments as globally reputed logistics companies not only invest their capital, but also bring expertise without which the country cannot catch up to keep up its growth.
