On course to a logistics hub
Top DHL official speaks on efficiency of Bangladesh in trading goods
Bangladesh is moving upward in the world ranking in logistics, and so is the confidence of the global logistics service providers operating here.
Bangladesh is an important market worldwide, says Amadou Diallo, chief executive of South Asia Pacific region of DHL Global Forwarding, one of the four divisions of DHL, the world’s leading logistics provider.
“If you consider the size of the market in Bangladesh and benchmark it, the country has almost double the population of Germany,” Diallo says in an interview with The Daily Star.
Bangladesh has improved in all dimensions in terms of air and sea freight, and customs operation.
Out of 155 countries, Bangladesh has emerged as an over-performing country in providing efficiency in trading goods.
Its ranking in the global Logistics Performance Index (LPI) is now 79, much above other South Asian countries such as Pakistan, Sri Lanka, Nepal, Bhutan and the Maldives.
In the LPI by the World Bank, Bangladesh retains the second position in South Asia after India.
Also, improved logistics efficiency is in the pipeline as the country moves to scale up infrastructure by investing in road network to join other Asian countries and build deep-sea port.
Bangladesh registered over 5 percent growth in annual output in the past decade.
“It’s all going to uplift Bangladesh,” says Diallo.
DHL, which was engaged in offering logistics services to local customers through representative since 1984, unveiled its plan last week to expand its reach in Bangladesh’s logistics market that is growing on a steady rise in exports and imports every year.
DHL teamed up with a local company — Trade Clippers Ltd.
The giant in global logistics service sector says it will invest $10 million in the next three to five years to upgrade its warehousing and cargo handling facilities, develop fashion and logistics industry and improve information system.
Diallo, the Senegal-born executive, says the entry of DHL Global Forwarding will enable Bangladesh to become more logistic-efficient.
“As we are investing and putting in place all the tools that we have and trained people, it will help Bangladesh proclaim to the world that it has the supply chain solutions that are comparable to those existing in the United States, Germany or any other places,” he says.
“We think that we can gain 10 percent efficiency in terms of logistics cost because barriers have been broken down.”
It is a few years back when DHL decided to invest in Bangladesh, one of the emerging markets because of its consistent economic growth, supported by increased exports and remittance earning.
In the last one decade, per capita GDP (gross domestic product) as well as consumption in the country has doubled, despite having a growing population — now around 150 million.
With all these factors, Bangladesh is becoming more attractive to foreign investors.
“If you ask the investment bankers, they will tell you that a lot of investors are planning to come for investing in Bangladesh,” the DHL top official says.
Diallo says DHL wants to organise itself in advance to understand the supply solution needs of both local and foreign investors within and beyond Bangladesh.
“We think if we want to help emerging markets grow and profit from those markets, we need to be there at the beginning than at the end,” he says. “We think this is the right time to come to Bangladesh.”
The DHL executive says Bangladesh’s main export earner apparel industry offers huge scope for logistics service sector.
The government move to link Bangladesh with the other Asian countries through the Asian highway, and allow India to use Bangladesh’s seaport also offers potential for a good logistic business in future.
“India has decided to use Bangladesh as a hub. So we, as a logistic company, will really be not so smart if we decide that we won’t consider using Bangladesh as a hub,” Diallo says.
“I think Bangladesh is a natural hub even for distribution from India to India,” he adds.
“Given the infrastructure that is put in place and more investments that are taking place in green areas, we think that in terms of effective supply chain, Bangladesh certainly will become a better hub.”