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Ishtiaq Part 3

Bangladesh's economy is significantly driven by the ready-made garments (RMG) sector, which contributes 14.07% to GDP and 81% to export earnings. However, the sector faces major supply chain challenges, including port congestion, inadequate infrastructure, and a lack of integration across transportation modes, which hinder its growth. Proposed solutions include port modernization, infrastructure development, and technology adoption to enhance efficiency and streamline logistics.

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Ishtiaq Part 3

Bangladesh's economy is significantly driven by the ready-made garments (RMG) sector, which contributes 14.07% to GDP and 81% to export earnings. However, the sector faces major supply chain challenges, including port congestion, inadequate infrastructure, and a lack of integration across transportation modes, which hinder its growth. Proposed solutions include port modernization, infrastructure development, and technology adoption to enhance efficiency and streamline logistics.

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kazipulock123
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Bangladesh is a fast growing economy powered by the readymade garments (RMG) industry which

has promoted the country in the world through the motto ‘Made in Bangladesh. In terms of core
economic consideration RMG holds almost 14.07 percent of the GDP of Bangladesh as well as the 81
percent of the total export earnings. (Islam et al., 2019). To have a look how
fast the RMG sector evolved In Bangladesh, we need to visualise
the number of factories increased during the time period of 1883
to 2014.

This figure showcase a positive trend of the rise of Bangladesh RMG sector but not the overall
picture. Bangladesh RMG sector could grown much more from the data shown in the table.

Competitive efficiency of the Bangladesh RMG sector remains impeded by major supply chain
routing problems. Primary supply chain challenges emerge from restricted infrastructure as well as
inefficient logistics practices and network fragmentation throughout transportation.

Key Routing Challenges:

1.Port Congestion: Chittagong together with Mongla ports persistently experience intense port
congestion. The congestion at ports results in slower cargo handling along with prolonged vessel
delays together leading to significant higher transportation expenses (Rahman &
Chowdhury, 2018).The 2020 data shows vessels waited an average of 5.2 days at the port
while remaining above global waiting times reported by the World Bank (2021).
2.Inadequate Infrastructure: Noncritical last-mile connectivity and poor state of national highways
much like poor rail network infrastructure expand shipping time while driving up transportation costs
(Islam et al., 2019). Slow delivery times and increased fuel consumption with higher transportation
costs are the results.
3.Limited Inland Waterways: The untapped environmental potential exists within inland waterway
transportation services which present a cost-efficient way to move goods. According to Bangladesh
Inland Water Transport Authority (2022) statistics inland waterways transportation handles 5-7% of
total cargo.
4.Lack of Integration: The main obstacle for efficient transport systems arises from the non-
alignment between various transportation forms. Well-coordinated intermodal transport systems
with optimal road-rail-water interchanges and sufficient numbers of container depots are essential to
support efficient cargo movement but these essential systems are currently absent.
5. Data Limitations: The challenge of route planning and optimisation becomes difficult because real-
time data concerning cargo movements and transportation conditions as well as available options
remain out of reach.
6. Dependency on Imported Raw Materials: The Bangladesh RMG sector relies heavily on imported
raw materials especially cotton. USDA reporting indicates that Bangladesh brought in 7.87 million
cotton bales throughout the 2023/24 cotton marketing period (USDA, 2024). The production
schedules face severe disruptions when specific imported materials take longer to receive because of
inefficient supply chain routing problems which create delays at ports and insufficient infrastructure

Political Instability: Current political disturbances have disrupted supply chain management
procedures. Production delays and delivery schedule disruptions occurred after Bangladesh
Awami League issued an internet shutdown followed by strikes and protests in July-August.

Solutions to these Challenges:

Port Modernisation: Port facilities should receive capital investments to establish automated cargo
handling equipment and expand storage area while installing improved highways for intermodal
transport connections.
Infrastructure Development: Investments in national infrastructure should emphasise expanding
roads and rails by improving points of last-mile delivery while decreasing overall journey times.
Serialise fiscal resources to support programs that develop inland waterways while modernising river
terminal facilities through dredging initiatives.
Multimodal Transportation: Strategies to advance multimodal transportation through enhanced
linkages between transport modes will include developments such as creating road-rail-water
interchanges and building container depots.
Technology Adoption: The supply chain benefits from implementing GPS tracking together with RFID
along with blockchain technology to enhance efficiency and supply chain transparency.
Data-Driven Decision Making: Establish a complete transportation data platform which delivers real-
time analytics about cargo movement together with traffic information and available transportation
solutions.
Public-Private Partnerships: Private companies should partner with public entities to fund building
transportation networks and directing logistics management practices.

A recent Phenomenon
The export logistics for ready-made garments (RMG) conducted by Bangladesh now transit through
the Maldives instead of using Indian ports as their previous routing method. The new export logistics
strategy leads Bangladesh RMG products to travel from the Maldives to global markets including Zara
and H&M through sea and air cargo services.

References
Islam, M. S., Rahman, M. M., & Islam, M. A. (2019). Challenges and Opportunities of the
Ready-Made Garments Industry in Bangladesh. Journal of Business & Economic
Policy, 6(1), 1-17.

Rahman, M. M., & Chowdhury, M. F. (2018). Impact of Port Congestion on the Ready-Made
Garments Industry in Bangladesh. Journal of Business & Economic Research, 10(2), 115-
126.

World Bank. (2017). Bangladesh: Country Partnership Framework 2016-2020. Retrieved


from https://documents1.worldbank.org/curated/en/585151601566378168/pdf/Main-
Report.pdf
World Bank. (2021). Bangladesh Development Update: Navigating the Next Decade.

Bangladesh Road Transport Authority (2022). Annual Report.


Bangladesh Inland Water Transport Authority(2022). Statistical Yearbook.

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