Bangladesh fails to improve logistics strengths
The country ranks at the bottom among four emerging South Asian economies on Agility logistics index
Business climate has tugged down Bangladesh's rank yet again to the lowest among four emerging South Asian economies in the Agility Emerging Markets Logistics Index 2022.
Bangladesh dropped one position to rank 39th among 50 of the world's most promising emerging logistics markets, according to the 13th edition of the index unveiled on Tuesday by Agility – a Kuwait-based global logistics company.
The country is behind India (2nd), Pakistan (27th) and Sri Lanka (33rd), reflecting its lack of improvement in providing domestic and international logistics opportunities.
Bangladesh has been languishing at the lowest position among the four emerging South Asian economies on the index since 2019.
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The index ranked the world's 50 leading emerging markets for overall competitiveness based on four metrics: domestic logistics opportunities, international logistics opportunities, business fundamentals and digital readiness – factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors.
Bangladesh's overall score in these metrics is 4.44 out of 10 – same as the previous year.
China, the world's largest economy, held its spot at the top in the overall ranking with the highest overall score of 8.5, followed by India, the UAE, Malaysia and Indonesia.
How Bangladesh performed in the metrics
Bangladesh's overall performance was undermined by its weak performance in business fundamentals metric, measured by the openness, robustness, fairness and strength of an emerging market's business environment, rule of law and market independence. The country scored only 3.44 and ranked 44th in this category.
The top four emerging markets in terms of business fundamentals – the UAE, Malaysia, Saudi Arabia, Qatar – have remained the same for three consecutive years.
The report mentioned that the business fundamentals ranking has emerged as a core competence and strength for the Gulf countries.
The domestic logistics opportunities metric measures the performance of each emerging market and its potential to sustain and develop domestic demand that requires competitive logistics markets.
On the other hand, the international logistics opportunities measures internal and external demand for trade intensive logistics services and the capacity of individual emerging markets to facilitate cross-border logistics operations.
In terms of both domestic and international logistics opportunities, Bangladesh got deranked by one position to 20th and 41st by scoring 4.99 and 4.38 respectively.
Powerhouse exporters China, India and Mexico topped the rankings for international logistics. China, India and Indonesia ranked highest for domestic logistics.
The index introduced a new metric this year – digital readiness – which measures the spread and depth of digital skills, the strength and diversity of digital business models and the adoption of and access to online commerce.
Bangladesh ranked 34th and scored 4.38 in this metric.
Freight rates to normalise
Apart from the index rankings, the report also reveals a survey of trade and logistics industry professionals each year.
Roughly two-thirds of the 756 industry professionals surveyed for the index believe shippers will see cargo rates come down by year end. About 80% of them expressed their hope that port bottlenecks, air capacity shortages and trucking issues will ease by the end of the year.
Agility Chief Executive Officer Tarek Sultan said, "The industry's optimism reflects the fact that emerging economies are getting more resilient and figuring out ways to weather supply chain disruption."
He added, "If emerging markets can get better access to vaccines and give small businesses a boost, they can help power a broad, dynamic global recovery."
