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A third-party logistics service provider in Bangladesh manages and executes transportation and warehousing on behalf of a shipper. The logistics sector in Bangladesh consists of three types of firms: Clearing and forwarding agents, Carrier and transport operators, and Warehouses.
Currently, 837 freight forwarding companies are registered under Bangladesh Freight Forwarders Association (BFFA) and the estimated industry size is more than $1.5 Billion (Source BFFA Senior Vice President).
One of the industry leaders is MGH Group with seven freight forwarding agencies and six shipping lines. MGH accounted for 30% volume share of export sea freight in Bangladesh and 55% of total European exports. The industry has directly generated 40,000 jobs in the last three decades.
Covid 19 has significantly disrupted the global supply chain and hence, will dampen Bangladesh’s global import-export targets for the year. This will automatically trickle down its impact on the logistics industry and the following ramifications may take place in the short term:
The government may introduce policies to minimize associated trade costs for logistics providers in order to help them stay afloat. The industry association needs to support the small players in order to minimize degrowth while also paying attention to the blue-collar workforce’s economic sustainability.
Author: Sanjir Ali, Senior Business Consultant, LightCastle Partners
The LightCastle team has been analyzing the macro and industry level picture and possible impacts wrought about by the Covid-19 crisis. Over the following days, we’ll be covering the major sectors shedding light on the possible short and long term ramifications of the global pandemic. Read all the articles in the series.
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