Bangladesh Transport & Logistics Analysis
Infrastructure, Connectivity, and the Cost of Moving Goods
BDPolicyLab · 2026-06-15
Bangladesh moves goods at roughly 16 percent of GDP, against a global average near 10 percent (World Bank, 2023), and the gap is concentrated at one chokepoint: Chittagong handles the bulk of containerised trade through a single-channel port already running above its installed design capacity. The binding constraint is not asphalt but throughput at the water's edge and at customs. Chittagong handled 3.17 million TEU in FY2023-24 (Chittagong Port Authority), and the country's Logistics Performance Index score sat at 2.6 in 2023, ranking 88th of 139, up from 100th in 2018 (World Bank LPI 2023). The 12-place rise came from competence and timeliness, not from infrastructure, which is the diagnostic: the next decade of logistics gains will come from clearance speed, berth capacity, and modal balance, not from widening more roads. This brief assigns three owners to the three measurable levers.
Key findings
- Bangladesh's logistics deficit is a throughput problem at the port and the customs gate, not a pavement problem. Bangladesh's logistics deficit is a throughput problem at the port and the customs gate, not a pavement problem. Adding road kilometres while Chittagong runs above design capacity and clearance takes the better part of a week will not move the 16-percent-of-GDP logistics bill. The test of any 2026 connectivity plan is whether it shortens dwell time and adds deepwater berth capacity on a dated schedule, not whether it cuts ribbons on new highways.
- Logistics cost is about 16 percent of GDP, well above the ~10 percent global average. The World Bank estimates Bangladesh spends roughly 16 percent of GDP on moving goods from factory to customer, against a global average near 10 percent (World Bank, 2023, reported via The Daily Star). Between 35 and 54 percent of that cost is linked to inefficient transport systems, and the World Bank counts more than 60 regulatory bottlenecks, most fixable through coordination rather than capital. The Bank estimates a 26 percent cut in logistics cost could lift exports by about 19 percent.
- Chittagong handled 3.17 million TEU in FY2023-24, running above its installed design capacity. Chittagong Port handled 3.17 million TEU in FY2023-24 and a record 3.29 million TEU in FY2024-25 (Chittagong Port Authority, reported via Container News and The Business Standard). The port's original design capacity was about 1.75 million TEU, so current throughput sits well above nameplate. Operating above design capacity is possible only by trading off berth waiting time, yard dwell, and equipment wear: the port runs at peak utilisation, not comfortable utilisation. The Bay Terminal, a Chittagong Port Authority project (not BIWTA, which governs inland waterways), is the planned capacity addition. As of 2026 it remains in the pre-construction and procurement phase with PSA Singapore and DP World as terminal partners and a World Bank breakwater agreement signed in 2024; CPA targets first-unit operation by 2030 (The Daily Star; New Age, 2026).
- WHO estimates 31,578 road deaths in 2021, roughly six times the government's police-reported count. The WHO Global Status Report on Road Safety 2023 estimates 31,578 road traffic deaths in Bangladesh in 2021, about 18.6 per 100,000 against a population of 169.4 million. The government's police-reported figure for the same year is 5,084 (BRTA, cited by WHO), and the BRTA has publicly rejected the WHO estimate. The roughly six-fold gap is itself the finding: the country cannot manage what it does not measure, and a credible fatality registry is a precondition for any safety target.
- The RHD-classified network is about 21,000 km; the LGED rural network is about 149,000 km. The Roads and Highways Department manages a classified national, regional, and zila road network totalling roughly 21,000 km (Banglapedia, Road Transport, citing RHD). The Local Government Engineering Department manages a separate rural network of about 149,167 km of feeder and village roads. The policy point is balance, not length: Bangladesh has built extensive road kilometres while the binding logistics constraints, port berth capacity and customs clearance, have not kept pace. An OpenStreetMap cross-check of the paved trunk classes is broadly consistent with the RHD order of magnitude but is not used as a precise measure, because the derivation relies on a coarse degree-to-kilometre conversion.
- Owner-assigned actions: cut customs dwell, deliver Bay Terminal berths, fix the fatality registry. 1. Cut Chittagong customs dwell time, owner: National Board of Revenue (NBR) with the Chittagong Port Authority. The World Bank attributes the bulk of avoidable logistics cost to clearance and coordination, not transport hardware. Target a single-window clearance pathway for compliant exporters and publish monthly median dwell time on the NBR site. Expected effect: moving toward the ~10 percent global logistics-cost benchmark releases a margin the World Bank links to roughly a 19 percent export gain. Success signal: published median import dwell time falling year on year, audited against CPA gate records. 2. Hold the Bay Terminal to a dated capacity-delivery schedule, owner: Chittagong Port Authority. Because Chittagong already runs above its ~1.75 million TEU design capacity, new deepwater berth capacity is the only durable fix for congestion. Bind the project to the CPA's own stated first-unit-by-2030 target and report quarterly physical progress. Success signal: verifiable construction milestones (breakwater, first berth) on schedule, with annual added TEU capacity disclosed. 3. Build a credible road-fatality registry, owner: BRTA with the Directorate General of Health Services. The six-fold gap between the WHO estimate (31,578) and the police count (5,084) for 2021 makes every safety target unfalsifiable. Link hospital trauma records to police crash reports and publish a reconciled annual figure. Success signal: a single official fatality series that closes the WHO-versus-police gap and can be tracked against a stated reduction goal.
- What would change the conclusion: the strongest counterargument and the key data risks. The strongest counterargument is that road investment is not wasted: a denser, better network lowers feeder costs and is a precondition for any modal shift. That is true, and this brief does not argue against maintenance or targeted corridor upgrades. The claim is narrower: at the current margin, with the port above design capacity and clearance slow, the highest-return taka goes to throughput, not to more lane-kilometres. What would change the conclusion: if independent CPA data showed berth utilisation comfortably below capacity, or if customs dwell time were already near regional best practice, then the binding constraint would shift back toward the road and rail network. Two data risks remain. First, the WHO fatality estimate is modelled and contested by the government; the registry recommendation is precisely the way to resolve it rather than to litigate it. Second, the Bay Terminal timeline has slipped repeatedly, so a 2030 first-unit target should be treated as a commitment to audit, not a settled fact.
Executive Summary
Bangladesh's logistics cost of 20.0% of GDP is 3.5 percentage points above Vietnam and 12.0 points above the OECD benchmark, functioning as a structural tax on every export container. Three completed mega projects (Padma Bridge, Metro Rail Line 6, Bangabandhu Tunnel) have meaningfully expanded the network since 2022, yet road transport still carries 70% of freight on an aging fleet averaging 15 years. Chittagong Port (3,169,000 TEU) processes over 90% of external trade through a 9.1-meter draft that forces expensive transshipment. Road fatalities at 7,221 per year signal a public health and productivity crisis. The base case is gradualist improvement; the risk case is a competitiveness trap as Vietnam and India widen their logistics efficiency lead. Closing the gap requires three simultaneous interventions: Matarbari deep-sea port commissioning, inland waterway revival, and full enforcement of the Road Transport Act 2018.
Logistics Cost: Where the Competitiveness Gap Lives
At 20.0% of GDP, Bangladesh's logistics cost is the most consequential single number in this brief. For comparison: India at 13%, Vietnam at 16.5%, and the OECD at 8%. The gap versus Vietnam (3.5 percentage points) translates directly into price disadvantage for RMG exporters competing for the same buyer orders. The sources are structural, not cyclical: 90% port concentration at a single shallow-draft facility, fragmented multimodal connections (WB LPI score 2.6/5.0), customs documentation averaging 3-4x best-practice dwell times, and a fleet too old to be efficient.
Total freight stands at 250.0 million tonnes. Road transport holds 70% modal share; inland waterways 14%; rail 16%. This extreme road dependency is self-reinforcing: congestion on the Dhaka-Chittagong corridor inflates haulage rates, which discourage modal shift, which sustains road dominance. Only 18% of commercial vehicles are under five years old, against a fleet mean age of 15 years, producing above-average fuel consumption, maintenance costs, and accident rates.
Base case: Matarbari commissioning (2026-2027) plus incremental customs digitization reduces logistics cost to 16-17% of GDP by 2030. Risk case: Matarbari delays, continued dredging underfunding, and stalled gauge standardization leave costs above 18%, accelerating buyer relocation to Vietnam and India.
Port Infrastructure: One Gateway, One Vulnerability
Chittagong Port processed 3,169,000 TEU in the latest period. As the gateway for over 90% of Bangladesh's international trade, it is simultaneously the country's most critical asset and its most concentrated single point of failure. The 9.1-meter draft limits calls to post-Panamax feeder vessels, requiring transshipment through Colombo, Singapore, or Port Klang at an estimated cost premium of $300-500 per container and 5-7 additional transit days. Container dwell times exceed 10 days, against 3-4 days at efficient regional peers.
Mongla Port at 105,000 TEU operates well below capacity but has gained strategic relevance since the Padma Bridge (opened June 2022) cut Dhaka-Mongla transit from 12 hours to under four. Payra remains in early operations.
Matarbari Deep Sea Port, under construction with JICA financing, is the single most consequential infrastructure investment in the pipeline. An 18-meter draft capable of berthing 8,000 TEU mother vessels will eliminate transshipment dependency, cut per-container costs by an estimated $200-400, and reduce transit times by 3-5 days. Commissioning by 2026-2027 defines the base case for port competitiveness.
Road Network and Safety: The Aging Fleet Problem
The national highway network spans 22,476 km, connected by the three completed mega projects that reshaped Bangladesh's transport geography: the Padma Bridge (6.15 km, June 2022) cut Dhaka-Khulna travel from 8-10 hours to 3-4 hours and activated economic corridors to 21 southwest districts; Metro Rail Line 6 (20.1 km, December 2022) became Bangladesh's first mass rapid transit system, absorbing latent demand in a city where road speeds fall below 7 km/h at peak; the Bangabandhu Karnaphuli Tunnel (3.32 km, October 2023) connected eastern Chittagong to the Cox's Bazar highway, reducing the route by over 40 km.
Against these gains, road safety is a critical crisis. 7,221 deaths per year place Bangladesh among Asia's worst performers on fatalities per vehicle-km. The causal chain is clear: a fleet averaging 15 years with only 18% of vehicles under five years old, weak enforcement of the Road Transport Act 2018, inadequate pedestrian infrastructure, and systematic overloading on freight corridors. Economic costs run to an estimated 2-3% of GDP in lost productivity, medical expenditure, and insurance. The Road Transport Act 2018 introduced stricter penalties; full digital enforcement (CCTV, automated ticketing, age-based retirement mandates) has not followed.
Railway and Inland Waterways: Underutilized Assets
Bangladesh Railway's 2,956 km network carries 78.0 million passengers annually but negligible containerized freight. The dual-gauge legacy, broad gauge (1,676 mm) in the west, meter gauge (1,000 mm) in the east including the Dhaka-Chittagong corridor, prevents through-running of rolling stock and containers. Every cross-gauge shipment requires manual transloading, adding cost and time that road haulage does not. Gauge standardization to broad gauge is technically straightforward but capital-intensive. The Dhaka-Chittagong corridor is the correct first phase: highest freight density, clearest return on investment.
Inland waterways present the largest untapped opportunity in the sector. The 24,000 km total network includes 5,968 km navigable year-round. Waterway cargo at 35.0 million tonnes represents only 14% of total freight, far below the network's physical capacity. Siltation is the primary constraint: BIWTA's dredging budget and fleet are insufficient for systematic maintenance, navigable depth declines seasonally, and river terminals lack intermodal connections to road and rail. A committed multi-year dredging program combined with modern terminals could shift 20-25 percentage points of freight off roads, simultaneously reducing logistics costs, road wear, and emissions.
Regional Connectivity: Frameworks Ahead of Implementation
The BBIN Motor Vehicle Agreement (Bangladesh, Bhutan, India, Nepal), ratified by three of four signatories, is the most actionable regional connectivity instrument available. Full implementation eliminates transloading at border crossings, where goods are currently unloaded from one country's trucks and reloaded onto another's under a colonial-era protocol. The BCIM Economic Corridor and Trans-Asian Railway are longer-horizon instruments requiring diplomatic alignment beyond Bangladesh's control. Near-term leverage lies in BBIN implementation and bilateral land port modernization with India.
Scenarios and Policy Priorities
Base case (2030): Matarbari operational, single-window customs reduces dwell times by 40%, waterway dredging funding increased 2x, Road Transport Act enforcement digitized. Logistics cost falls to 16-17% of GDP. Chittagong Port throughput grows at 5-7% per year. Rail gauge standardization on Dhaka-Chittagong corridor initiated.
Risk case (2030): Matarbari delayed beyond 2028, dredging underfunded, enforcement gaps persist. Logistics cost remains above 18%. Vietnam and India widen efficiency advantage. Buyer sourcing diversification accelerates at Bangladesh's expense.
Five prioritized recommendations:
- Commission Matarbari on schedule and build hinterland connectivity now. The deep-sea port's value depends on road and rail access to Chittagong's industrial hinterland. Start hinterland infrastructure three years before commissioning, not after.
- Standardize Dhaka-Chittagong rail to broad gauge as Phase 1. This single corridor carries the highest freight potential. A phased 8-10 year program beginning here unlocks containerized rail freight that competes with road on cost and speed.
- Establish a dedicated inland waterway dredging authority with a 10-year budget mandate and public-private partnerships for vessel fleet renewal. Target: restore 5,968 km to full navigable depth within five years, shifting freight share from 14% toward 20%.
- Enforce the Road Transport Act 2018 digitally. Automated enforcement, age-based vehicle retirement mandates, and mandatory fitness testing are the fastest levers to cut the 7,221 annual fatalities and the 2-3% of GDP in accident costs.
- Build five regional cold-chain hubs linked to Chittagong and Matarbari, targeting pharmaceutical and seafood export corridors where Bangladesh has revealed comparative advantage and where cold-chain failure currently costs 25-40% of perishable output.
Data sources: Roads and Highways Department (RHD 2023), Bangladesh Road Transport Authority (BRTA 2023), Bangladesh Railway (BR 2023), Bangladesh Inland Water Transport Authority (BIWTA), Chittagong Port Authority (CPA FY2023-24), World Bank Logistics Performance Index 2023, ADB Transport Sector Assessments, JICA studies.
Data and methodology
Port throughput figures are Chittagong Port Authority annual handling totals (FY2023-24 and FY2024-25), reported via Container News and The Business Standard; the original design-capacity figure (~1.75 million TEU) is from port-capacity assessments. Logistics-cost share of GDP is the World Bank estimate reported in 2023 (~16 percent), benchmarked against the ~10 percent global average. Logistics Performance Index score and rank are from the World Bank LPI 2023 (score 2.6; 88th of 139, up from 100th in 2018). Road-fatality figures are the WHO Global Status Report on Road Safety 2023 modelled estimate (31,578 deaths, 2021) and the BRTA police-reported count (5,084, 2021) as cited by WHO; the per-100,000 rate is derived from the WHO estimate and the WHO-used population (169,356,251). Classified road-network length (national, regional, zila ~21,000 km; LGED rural ~149,167 km) is from Banglapedia (Road Transport), citing the Roads and Highways Department. An OpenStreetMap cross-check derived from bd_roads.parquet (Geofabrik Bangladesh extract, snapshot 2026-05-03) is reported only as an order-of-magnitude corroboration: it converts WKT geometries to kilometres with a coarse uniform degree-to-kilometre scale that overstates true length and is not used as a precise figure. The RHD-classified total is the primary network measure.