The freight forwarding sector is a backbone for global trade, ensuring the seamless movement of goods across borders. In Bangladesh, this sector is critical in facilitating the export of garments, seafood, pharmaceuticals, agricultural products, leather, perishable items, and more. Despite its importance, freight forwarders in the country face persistent challenges that hinder their ability to operate efficiently and contribute optimally to trade facilitation. Lack of recognition of freight forwarders’ role: Stakeholders such as manufacturers, exporters, and importers often undervalue the role of freight forwarders, perceiving them merely as service providers rather than strategic partners. This perception limits collaboration and trust, preventing forwarders from innovating and offering value-added services. 

Additionally, policy formulation in Bangladesh rarely involves consultations with freight forwarders or other key stakeholders. This results in policies that fail to address operational needs and create complications. Freight forwarders frequently encounter difficulties with the National Board of Revenue (NBR), customs authorities, government agencies, port authorities, and banks. Regulators and facilitators have yet to fully recognize the strategic importance of freight forwarders in trade facilitation. Licensing and regulatory issues: The licensing regulations set by the NBR are outdated and require urgent revision. Freight forwarders must obtain separate licenses for each port, an inefficient process that increases operational complexity. A unified licensing system across Bangladesh would significantly streamline operations. Online application submissions and simplified procedures are also critical to modernizing this process. 

Inefficiencies in customs operations: Freight forwarders often face undue delays due to inefficient customs operations. Lengthy queues and slow processing of day-to-day formalities hinder smooth operations. Arbitrary decisions and complicated procedures surrounding the Import General Manifest (IGM) and Export General Manifest (EGM) further reduce efficiency and competitiveness. 

Customs decisions frequently result in delays, fines, and unnecessary complications. Moreover, freight forwarders often struggle to reach the relevant customs officials for clarifications or dispute resolution. The lack of timely communication exacerbates delays and increases uncertainty. Ambiguities in existing regulations create opportunities for inconsistent enforcement, leading to malpractice and inefficiencies. Freight forwarders are often subject to subjective judgments by officials instead of standardized rules, causing delays in cargo clearance and increasing costs. 

Burdensome taxes and banking policies: Freight forwarders in Bangladesh face high taxes on international transactions, such as payments to shipping lines and overseas agents. These include Value Added Tax (VAT) and Advance Income Tax (AIT), which significantly inflate operational costs. Foreign exchange transactions through formal banking channels are also taxed heavily, adding to the financial burden. 

Policies from the central bank further complicate operations. For instance, handling Bills of Lading (B/L) — essential documents in international shipping — remains inefficient due to outdated and manual verification processes mandated by Bangladesh Bank. These delays disrupt supply chains and increase operational costs. 

Another challenge is remitting payments to foreign service providers. Freight forwarders encounter lengthy approval processes and excessive documentation requirements, which strain relationships with international partners. Delays in payment transfers also result in penalties and lost opportunities for preferential rates. 

Unregulated practices by shipping lines: Shipping lines in Bangladesh frequently impose arbitrary charges without prior notice or justification. Detention charges for delayed container returns—often due to port congestion or customs inefficiencies—are a prime example of unfair costs borne by freight forwarders. 

Additional charges, such as non-schedule fees and unforeseen delay penalties, further burden the industry. The absence of effective regulation has allowed monopolistic behaviours among shipping lines, where dominant players dictate terms to freight forwarders and their clients. These practices increase costs, create an unethical trading environment, and threaten the competitiveness of the country’s trade sector. 

Challenges in bonded warehousing and cargo villages: Bonded warehouses are vital for trade facilitation, but inefficiencies and outdated regulations hinder their effective use. Freight forwarders have called for reforms, including merging bonded warehouse licenses with freight forwarding licenses to streamline operations and reduce redundancy. 

The cargo village at Hazrat Shahjalal International Airport (HSIA) is another area of concern. Freight forwarders face arbitrary charges, inadequate facilities, and subpar adherence to Key Performance Indicator (KPI) standards. The single Explosive Detection System (EDS) at HSIA creates bottlenecks, leading to delays in cargo screening. Additionally, space constraints result in congestion and mishandling of goods, while inadequate security measures raise concerns about theft. Chittagong Port IS a critical bottleneck: Chittagong Port, the primary gateway for Bangladesh’s imports and exports, faces severe operational and infrastructural challenges. Congestion due to insufficient berths, cranes, and container storage facilities causes significant delays, particularly for time-sensitive exports. 

The issue of non-delivered containers further compounds these challenges. Freight forwarders report backlogs of unclaimed shipments, leading to heavy fines and blacklisting by shipping lines. This disrupts local operations and international supply chains. The crisis is attributed to customs authorities’ failure to enforce Section 82 of the Customs Act of 1969, which mandates the timely auctioning of unclaimed goods. The resulting congestion increases costs and hampers efficiency. 

Solutions and recommendations: Addressing these systemic challenges requires immediate action and comprehensive reforms. Key recommendations include: Streamlining Licensing. Implementing a unified licensing system across Bangladesh and digitising the application process. Reforming Customs Procedures. Simplifying and digitising customs operations to reduce delays and improve efficiency. 

Enhancing Regulation. Establishing oversight mechanisms to prevent monopolistic practices by shipping lines. 

Modernising Infrastructure. Expanding bonded warehouse and port facilities, addressing space constraints, and investing in advanced screening technologies. Improving Banking Policies. Updating central bank regulations to facilitate smoother handling of Bills of Lading and foreign currency transactions. Stakeholder Engagement. Involving freight forwarders and other stakeholders in policy formulation to ensure practical and inclusive solutions. Conclusion: The freight forwarding sector in Bangladesh is indispensable for its trade-driven economy but faces numerous systemic challenges. Inefficiencies in customs, monopolistic practices by shipping lines, outdated regulations, and inadequate infrastructure are holding back the sector’s potential. 

Urgent reforms, including modernising policies, enhancing regulatory oversight, and investing in infrastructure, are essential to improve the logistics and trade environment. Collaboration between the government, regulators, and private stakeholders is critical for addressing these challenges. 

By implementing these changes, Bangladesh can unlock the full potential of its freight forwarding sector, boost export growth, and enhance its competitiveness as a global trade partner. A reform committee should be established immediately to drive these initiatives and ensure sustainable economic growth.

Kabir Ahmed is chairman of Conveyor Group and president of Bangladesh Freight Forwarders Association (BAFFA).