Every national budget ultimately seeks to answer a simple question: how will the economy grow? In the proposed national budget for FY2026-27, the government has set out an ambitious vision. It aims to restore economic stability, attract investment, diversify exports, improve competitiveness, and create jobs. The budget also seeks to raise foreign direct investment substantially over the coming years while positioning Bangladesh for a stronger role in regional and global trade.
These are important objectives. But achieving them will require more than fiscal measures, tax reforms, or infrastructure spending. It will require something that often receives less attention in public debate: a modern and efficient logistics system. The budget correctly recognises this reality. References to port modernisation, customs reform, export competitiveness, investment facilitation, and the development of Chattogram as a regional trade and logistics hub appear throughout the government’s economic strategy. This reflects a growing understanding that logistics is no longer merely a transport issue. It is now a core economic issue.
Investors may be attracted by incentives, but ultimately decide based on costs, predictability, and efficiency. Likewise, exporters remain competitive only when goods move quickly and reliably from factory to customer. Manufacturers may expand production, but growth becomes difficult when supply chains are slow, fragmented, or expensive. In today’s global economy, logistics is no longer a support function. It is a source of competitive advantage.
Bangladesh has made significant progress in expanding physical infrastructure over the past decade. New highways, bridges, economic zones, rail projects, and port developments have improved connectivity and increased capacity. Large investments are also underway in projects such as Bay Terminal, Matarbari Port, and various multimodal transport corridors. Yet infrastructure alone does not guarantee logistics efficiency.
A container’s journey does not begin and end at a seaport. It moves through customs procedures, transport networks, inland depots, warehouses, freight operators, shipping lines, regulatory agencies, and numerous service providers. Delays or inefficiencies at any point can increase costs across the entire supply chain.
This is where Bangladesh faces a growing challenge. The country’s logistics governance structure remains fragmented across multiple institutions. Ports, customs, roads, railways, inland waterways, and various regulatory agencies continue to operate largely within their own administrative boundaries. While each organisation performs important responsibilities, no single institution ensures that the logistics system functions as an integrated whole. As a result, improvements in one area do not always translate into improvements across the wider supply chain.
Port productivity may increase while congestion grows outside terminal gates. Customs systems may become digital while documentation processes remain disconnected from freight operators and transport providers. New infrastructure may be built while operational bottlenecks continue to undermine efficiency.
Many countries have discovered that logistics competitiveness depends as much on governance as on infrastructure. The most successful logistics hubs did not emerge simply because they built larger ports or wider roads. They succeeded because they created institutions capable of coordinating infrastructure, regulation, technology, and service delivery under a common strategy.
This lesson is becoming increasingly relevant for Bangladesh. The ongoing debate surrounding the future operation of the New Mooring Container Terminal (NCT) and Chittagong Container Terminal (CCT) illustrates why.
Several operators have expressed interest in managing the terminals under different commercial arrangements. International companies such as DP World and Red Sea Gateway Terminal have submitted proposals. Domestic operators and local consortiums have also entered the discussion. Some proposals involve concession-based models. Others propose service contracts where ownership and revenue collection remain with the port authority.
Much public attention has focused on which operator should be selected. While that question is important, it may not be the most important one. The more fundamental issue is whether Bangladesh has the institutional framework needed to regulate an increasingly complex logistics sector, regardless of who operates the terminals.
As logistics services become more commercialised and concession-driven, questions surrounding tariffs, service standards, competition, user protection, performance monitoring, and dispute resolution become increasingly important. Without effective regulatory oversight, even efficient infrastructure may fail to deliver broader economic benefits.
This is particularly relevant at a time when Bangladesh is seeking to attract greater foreign investment and prepare for the challenges associated with eventual graduation from Least Developed Country status. Once preferential trade advantages gradually diminish, competitiveness will depend increasingly on productivity, efficiency, and cost reduction. Logistics performance will therefore become even more important.
According to various international assessments, logistics costs in many developing economies remain significantly higher than those of competing manufacturing and trading hubs. Every additional day spent at a port, every unnecessary administrative process, and every avoidable transport delay ultimately increases the cost of doing business.
For exporters, these costs affect competitiveness. For consumers, they contribute to higher prices. For investors, they influence decisions about where to locate production facilities and regional supply chain operations. Viewed from this perspective, logistics reform should not be seen as a sectoral issue. It is a national economic priority.
This is why Bangladesh should now consider the next phase of logistics reform. The country has already adopted the National Logistics Policy 2025, which provides an important strategic framework. The challenge now lies in implementation.
A strong case can be made for establishing a National Logistics Commission or a similar institutional mechanism capable of coordinating logistics governance across agencies and modes of transport. Such a body would not replace existing institutions. Rather, it would help align their activities around common national objectives. It could support policy implementation, monitor performance, encourage digital integration, promote interoperability across logistics systems, facilitate stakeholder engagement, and help resolve cross-sector bottlenecks that individual agencies cannot address alone. Most importantly, it could ensure that logistics remains aligned with national economic goals rather than developing through fragmented and isolated initiatives.
The budget’s emphasis on investment, export growth, deregulation, and competitiveness is welcome. But these goals will be difficult to achieve if logistics costs remain high and supply chains remain inefficient. Bangladesh’s next development challenge is therefore not only about building more infrastructure. It is about ensuring that infrastructure operates as part of a coordinated, efficient, and user-focused logistics ecosystem.
The budget has correctly identified logistics as a critical enabler of economic growth. The next step is to recognise that logistics reform is not only an infrastructure agenda. It is also a governance agenda. Roads, ports, railways, and terminals create capacity. Institutions create efficiency.
If Bangladesh hopes to become a regional trade and logistics hub while attracting the scale of investment envisioned in the budget, strengthening logistics governance may prove just as important as building new infrastructure.
The writer is a Maritime, Logistics and Supply Chain Policy Analyst; Adjunct Faculty, Bangladesh Maritime University
