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As of 2023, Bangladesh operates only eight container vessels under its flag, far below the number required to meet 50% of total cargo demand.
Case study: Maintaining trade competitiveness in light of Bangladesh’s Flag Vessel Act 2019[1]
In 2019, the Bangladesh Flag Vessel Act was introduced, with the goal of strengthening its national shipping sector. The legislation mandates that at least 50% of cargo entering and leaving the country be carried on Bangladesh-flagged vessels. It has been reported while designed to promote local capacity, there are possible concerns how the policy may possibly affect trade efficiency and costs.[2][9][25]
The legislation was introduced in good faith to reduce reliance on foreign shipping lines, encourage investment in national carriers, and improve the maritime economy. However, the local fleet currently lacks the capacity to absorb such a high share of national container cargo. As of 2023, Bangladesh operates eight container vessels under its flag, and even with plans to increase this by up to six vessels by 2028, this is still far below the number required to meet 50% of total container cargo demand[7]. The shortfall could, at times, disrupt some trade routes, potentially in the ready-made garments (RMG) sector, which accounts for over 80% of Bangladesh’s exports[24][19].
Maintaining trade competitiveness
It has been stated that further modernising ports infrastructure could unlock a pathway to even greater growth. Policy reforms and public-private partnership (PPP) incentives for domestic fleet expansion could help further align national and commercial interests. Furthermore, modernising port infrastructure[22], digitising customs processes [34], and fostering greater regional shipping cooperation[35] could enhance the long-term competitiveness of Bangladesh’s trade ecosystem.
In a global economy defined by efficiency, agility, and climate accountability, it’s important to preserve export strengths while supporting maritime ambitions. Maintaining open and well-functioning logistics framework is important—not just for the shipping industry, but for wider economic growth.
Maintaining trade competitiveness requires balancing national maritime goals with market realities. Container shipping operators are under pressure to decarbonise and optimise global supply chains, while international buyers want predictable shipping timelines and cost structures.[32][25]
It has been reported some container shipping operators reported possible disruptions at key ports such as Chattogram[10], potentially impacting freight costs[2]. It has been reported administrative bottlenecks tied to the waiver process for foreign vessels may raise some concerns about possible impacts on shipment scheduling and transhipment routes, particularly via Colombo, a vital hub for international garment logistics.[25]
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Maintaining trade competitiveness in light of Bangladesh Flag Vessel legislation.
Maintaining trade competitiveness in light of Bangladesh’s Flag Vessel Act 2019
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