𝗙𝗮𝘀𝘁 𝗙𝗮𝗰𝘁𝗼𝗿𝗶𝗲𝘀, 𝗦𝗹𝗼𝘄 𝗣𝗼𝗿𝘁𝘀: 𝗪𝗵𝘆 𝗖𝘂𝘀𝘁𝗼𝗺𝘀 𝗣𝗼𝗹𝗶𝗰𝘆 𝗜𝘀 𝗡𝗼𝘄 𝘁𝗵𝗲 𝗥𝗲𝗮𝗹 𝗧𝗵𝗿𝗲𝗮𝘁 𝘁𝗼 𝗕𝗮𝗻𝗴𝗹𝗮𝗱𝗲𝘀𝗵’𝘀 𝗥𝗠𝗚 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀

Bangladesh’s readymade garment industry has mastered factory efficiency. Productivity, compliance, and scale have steadily improved, positioning the country as one of the world’s largest apparel exporters. Yet the next competitiveness battle is no longer inside factory walls. It is unfolding at ports — and increasingly, inside customs policy itself.

In today’s global apparel supply chain, speed and predictability matter as much as price. Buyers now plan tighter inventories, shorter lead times, and diversified sourcing. For them, a country’s port performance is no longer a logistics detail; it is a strategic risk indicator. In this environment, Bangladesh’s port speed and reliability have become decisive factors for the future of the RMG sector.

Chattogram Port handled over 3.3 million TEUs in the last fiscal year — the highest volume in its history — demonstrating strong export momentum despite global uncertainty. In recent months, the port even achieved multiple days of zero vessel waiting time, something once considered impossible. These gains were driven by better yard management, equipment deployment, and operational discipline, and were acknowledged by major global shipping lines. But the improvements have been fragile and inconsistent.

Historically, vessel turnaround at Chattogram has taken three to four days, compared to about one day at competing ports in Vietnam or Malaysia. This gap cannot be explained by cranes, draft depth, or terminal layout alone. The deeper problem lies in what happens after containers touch the ground: customs clearance, valuation disputes, and duty-driven congestion that slow evacuation and choke yard productivity.

This is where Bangladesh’s tariff and customs framework quietly undermines port efficiency.

High and uneven import duties — layered with supplementary and regulatory charges — create large gaps between declared and undeclared values. These “duty gaps” incentivize under-invoicing and misclassification. In a congested port environment, discretion expands, oversight weakens, and delay becomes a bargaining tool. Congestion is no longer just a symptom of inefficiency; it becomes economically useful to certain actors.

Global research confirms this behaviour. World Bank studies across South Asia show a direct relationship between high tariffs and trade evasion, with even small increases in duty rates producing disproportionately large increases in under-invoicing. Bangladesh’s historically high tariff dispersion amplifies this incentive structure.

For ports, the impact is immediate. Containers remain in yards longer, not because terminals cannot move them, but because clearance becomes negotiable. Import congestion reduces yard availability for export containers, slows gate operations, and disrupts sailing schedules. RMG exporters operating under strict delivery windows absorb these inefficiencies as higher logistics costs, demurrage, and shipment uncertainty. Buyer confidence suffers — quietly but steadily.

This dynamic explains why global terminal operators alone cannot solve Bangladesh’s port speed problem. Companies like DP World, APM Terminals, or PSA bring world-class systems for berth planning, yard automation, and real-time tracking. But even the best terminal cannot perform at design speed if containers cannot exit the yard due to customs delays. Ports are throughput systems. Customs policy determines whether throughput flows or stalls.

Regional experience makes this clear. Vietnam’s rise as a preferred apparel sourcing destination was not built on port infrastructure alone. It combined modern terminals with tariff rationalization, advance filing of documents, risk-based inspection, and aggressive use of post-clearance audits. Cargo moves quickly; compliance is enforced inland. Singapore operates one of the world’s fastest ports not because duties are collected at the quay, but because customs clearance is digital, predictable, and largely pre-arrival.

Bangladesh has begun moving in the same direction, but cautiously. Off-dock container depots now handle dozens of import categories, reducing pressure on Chattogram Port. Pre-arrival processing rules require earlier submission of import documents. National Single Window and post-clearance audit are aligned with WTO trade facilitation commitments.

Yet these reforms sit on top of an incentive structure that remains largely unchanged.As long as duty gaps remain wide, misdeclaration remains profitable. As long as clearance authority is concentrated at the port, congestion remains useful. And as long as customs performance is judged mainly by short-term revenue collection rather than compliance quality and clearance speed, port efficiency gains will remain episodic.

This is why the government’s recent decision to divide the National Board of Revenue into separate policy and revenue management wings is highly relevant for ports and logistics — not just fiscal governance.

Globally, separating tax and customs policy from administration is considered best practice. When the same institution designs tariffs and enforces them, policy often becomes shaped by short-term collection pressure and enforcement convenience rather than economic efficiency. A dedicated policy wing can rationalize tariffs, reduce extreme rate dispersion, and close classification loopholes that fuel congestion. A professional revenue management wing can focus on risk-based enforcement, post-clearance audits, and data analytics, shifting control away from physical holds at the port.

From a logistics perspective, this separation is not bureaucratic fine-tuning. It is about resetting incentives that currently undermine port speed.

If done correctly, the reform can directly improve port productivity. Containers will evacuate faster when valuation disputes are resolved through clear rules rather than negotiation. Yards will clear faster when compliance is enforced inland. Global terminal operators will finally be able to deliver the productivity gains they promise. Shipping schedules will stabilize. Exporters will regain predictability.

But the risks are equally real. If policy and administration operate in silos, new grey zones may emerge where ambiguity creates fresh rent-seeking opportunities. Without integrated data linking imports, VAT, income tax, bonded warehouses, and licensing, evasion will simply migrate rather than disappear. Global experience shows institutional separation work only when supported by transparency, unified data systems, and strong audit capacity.

For the RMG sector, the stakes could not be higher. Global buyers increasingly assess sourcing destinations through a logistics-risk lens. Delivery reliability now influences order allocation as much as price or compliance. Ports that cannot guarantee speed and predictability — regardless of factory capability — will steadily lose relevance in global value chains.

Bangladesh’s factories are fast. Its ports can be fast — Chattogram has already proven that. Global operators can raise productivity. But neither infrastructure nor concessions can overcome incentive structures that reward delay.

Customs policy is no longer a back-office issue. It is now a frontline determinant of port efficiency and export competitiveness. Dividing NBR is a necessary step. Using that reform to dismantle the economics of congestion is the real test.

If Bangladesh succeeds, port speed will become a strength, not a vulnerability, and the RMG sector will gain the logistics credibility it needs to compete in a faster, more demanding global market.

Written by: Ahamedul Karim Chowdhury

Adjunct faculty at Bangladesh Maritime University and former head of inland container depot at Kamalapur and Pangaon Inland Contianer Terminal under Chittagong Port Authority.