LOGISTICS is the physical manifestation of movement of capital and non-capital goods and services. Supply Chain Management is the overall planning, supervision and execution of that physical movement of the capital and non-capital goods and services. The activities of micro business units, peripheral and auxiliary units like supply and distribution channels and overall macro movement of the engine of the economy depend on logistics and management of logistics.
That being the case, logistics remains an undervalued aspect of the nation's economic thinking. This has had disastrous consequences. Infrastructure of installations directly connected to logistics -- ports and airports and land ports though which raw materials for manufacturing and industrial concerns arrive along with goods for service industry and manpower for professional and business needs and also tourists reach Bangladesh. The dilapidated ports and airports harm the country's GDP in the long term like inefficiency in any sector would.
But there is another ramification of this attitude of economic thinking where infrastructure development is looked down as secondary to core investments in sectoral aspects of the economy. We forget to talk about and devise strategy to implement development in power, roads, water and other utilities that are the core infrastructure on which production and distribution of goods and services depend. Economic thinking must put emphasis on development of primary infrastructure and infrastructure for facilitating smooth function of logistics.
The need for reiterating the crucial need for streamlining logistics sector by improving infrastructure and other aspects is therefore a necessity. In the last month or two, logistics has been making news in an unending sequence of negative developments. The Chittagong port has suffered terrible problems of congestion leading to the levy of Chittagong Port Congestion Surcharge or CPCS by feeder operators and court cases against this surcharge by exporters. That court case has been settled and to the credit of Chittagong Port Authority, there is emergency strategy being implemented in the port to get all backlogs cleared to allow turn around time (the time needed for ships to discharge cargo) for ships to come down again.
However, this is only a temporary measure that would not bring a lasting solution. Bringing private operators, and making changes in the structure, navigation and operational aspects of the port can solve the problems of the port. All sorts of action have been planned but the workers and vested quarters have blocked many proactive actions. Solutions touted have included privatising the port, something many experts consider a good solution because this would lead to new investment in technology, training, infrastructure, operational and navigational changes, human resource development etc. If workers and others can be convinced that no one will loose livelihood and those who wish to leave will be given golden handshakes with fare compensation, then much could be achieved.
The long-standing problem regarding the absence of regulatory framework for licensing of logistics companies is there and has got even more muddled. There are three court cases pending. The National Board of Revenue (NBR) being a regulatory body has issued statutory regularity orders issuing rules and guidelines for registration of logistics companies. The latest one was gazetted on July 07, 2006 and the earlier ones in October 2001 and July 2003. The logistics companies led by the two representative trade bodies -- Association of Cargo Agents of Bangladesh (ACAB) and International Freight Forwarders Association of Bangladesh (IFFAB) have challenged the requirements and provisions of the registration rules by going to court! The cases are lodged.
Unfortunately, there is no progress in solving this impasse since neither the NBR nor the logistics companies are any closer to talking with each other in a constructive way. The actions from the NBR remains clouded in finger pointing, with many people stating that, the ready-made garments sector has played a part in diluting many issues that could have been solved with better cooperation between the NBR and the logistics people. Whether such observers are true is not to be debated here. One thing is for sure e, the ready-made garments sector has long complained that the logistics sector charges high rates from them and also charges some fictitious charges that are not necessarily required for the moving goods.
Shipping companies and others have discounted this accusation of over-charging and have firmly maintained that logistics companies only charge the amount that is globally accepted and the rates are devised to ensure a high standard at an acceptable level of profit for the logistics companies.
Poor infrastructure and congestion in ports and airports and land ports, problems of regulations for registration logistics companies, misunderstanding between readymade garments sector and shipping companies and logistics companies are some of the problems besetting the logistics sector in Bangladesh. There is a need for comprehensive dialogue between all stakeholders in a roundtable conference backed by government and donor agencies. The presence of acceptable representatives of consultants and experts on maritime infrastructure and maritime regulations would benefit such a roundtable. Any decision then could take shape, consultants and experts could give suggestions on strategy and donor agencies could promise funds.
The need for a round table conference is quite an urgent one. Any suggestions for solving the problems in Chittagong port would require large sums of money. And once that is taken care of, amicable adjustment and arrangement with labour unions and others could be sorted out. Magic solutions do not exist, but we can certainly try to bring a lasting and practical solution and the start of such a process for finding a solution could be this roundtable that we have suggested.
