Maersk partners with ISATL to build new bonded warehouse in Chattogram, Bangladesh

In a significant move aimed at tackling logistical bottlenecks in Bangladesh‘s rapidly growing export sector, A.P. Moller – Maersk has partnered with Ispahani Summit Alliance Terminals Limited (ISATL) to construct a new 200,000sft custom bonded warehouse in Chattogram. This partnership is poised to provide a much-needed solution to the long-standing capacity challenges that have constrained the region’s ability to manage increasing trade volumes effectively. As both Maersk and ISATL focus on optimising the flow of cargo, this project marks a turning point for Bangladesh’s logistics infrastructure.

Addressing Logistical Challenges in Chattogram

Bangladesh, particularly Chattogram, has long been a critical hub for the country’s thriving garment export industry. While the volume of exports has seen substantial growth, the infrastructure, particularly in terms of warehouse capacity, has not kept pace. In fact, despite the rapid rise in exports, the number of warehouses in Chattogram has remained largely unchanged since 2012, except for the entry of ISATL in 2018. This lack of capacity has led to congestion, inefficiencies, and delays in the movement of goods.

With the construction of the new bonded warehouse, the partnership between Maersk and ISATL promises to alleviate some of these growing pains by doubling the warehouse capacity of ISATL in Chattogram and adding an additional 8% of warehouse space to the ecosystem. This is a vital step in addressing the logistical strain and creating a more efficient flow of goods in and out of the country.

The Importance of a Custom Bonded Warehouse

The new facility being developed by Maersk and ISATL will be strategically located within the existing Pathortoli facility in Chattogram, a key trade and shipping hub in Bangladesh. A custom bonded warehouse offers significant advantages for exporters. These facilities allow goods to be stored without the need to pay customs duties or taxes until the goods are cleared for export. This system helps businesses manage their inventory more efficiently, particularly in industries like textiles, where large quantities of goods need to be stored temporarily before shipping.

In addition to facilitating smoother operations for exporters, the custom bonded warehouse will also help alleviate congestion on the landside, which has been one of the most pressing issues in the region’s logistics sector. As Maersk’s Managing Director for Bangladesh, Angshuman Mustafi, points out, the facility will not only reduce congestion but also streamline the flow of cargo, thereby improving Bangladesh’s competitiveness in the global market.

Expert Insights into Maersk’s Long-Term Vision for Bangladesh

Maersk has long been committed to simplifying and connecting global supply chains, and this partnership with ISATL is an extension of that mission. According to Mustafi, Maersk’s decision to invest in this warehouse project stems from the company’s long-term vision for the country. He highlights that the solution provided by this facility will go beyond immediate relief, offering a sustainable framework to optimise ocean shipping, port handling, and inland logistics. This, in turn, will help Bangladesh’s export sector remain competitive as it faces increasing demand from international buyers.

As Mustafi explains, Maersk took swift action in 2021 to help alleviate congestion by deploying an additional vessel for evacuating export-loaded containers. While the immediate relief was welcomed, Mustafi adds that this warehouse project is a more comprehensive solution designed to address the underlying infrastructure issues that have hindered growth in the sector.

A Strong Partnership with Local Expertise

ISATL brings a wealth of local experience to the partnership, which complements Maersk’s global expertise. The Managing Director of ISATL, Yasser Rizvi, expressed pride in the partnership, noting that the combination of ISATL’s deep understanding of the local market and Maersk’s international best practices would result in the creation of a world-class facility. Rizvi emphasized that this project is not just about expanding capacity; it is about raising the standards for the entire logistics industry in Bangladesh.

The collaboration between Maersk and ISATL is seen as a model of how local knowledge and global experience can come together to create effective solutions for complex logistical challenges. This partnership could set the stage for future collaborations that aim to improve other aspects of Bangladesh’s supply chain infrastructure.

The Phased Approach to Warehouse Construction

Construction of the new warehouse is already underway, with the project expected to be completed in phases. The first phase of the facility will be ready for use by mid-2022, offering Bangladesh’s exporters much-needed capacity to manage the growing demands of international trade. By the time the full project is completed, it will significantly improve the capacity and efficiency of Chattogram’s logistics sector, creating a more streamlined and effective network for moving goods.

Impact on Bangladesh’s Export Sector and Global Trade

The development of this new bonded warehouse will have a profound impact on Bangladesh’s export sector. By reducing congestion and improving logistics, this project will not only help Bangladesh meet the growing demands of its international customers but also enable exporters to scale up their operations. In the long term, this facility will support the country’s ambitions of becoming an even more competitive player in global trade, particularly in industries like garments, where it holds a dominant position.

Moreover, the new warehouse will benefit overseas buyers by offering more reliable and efficient supply chain solutions. This partnership between Maersk and ISATL is a clear indication that Bangladesh is investing in its infrastructure to meet the demands of an increasingly interconnected global economy.

A Strategic Investment for Bangladesh’s Future

The partnership between Maersk and ISATL to build a custom bonded warehouse in Chattogram is a significant step in improving Bangladesh’s logistics infrastructure. The project is poised to address pressing issues like congestion, inefficiencies, and capacity constraints, while also enhancing the competitiveness of Bangladesh’s export sector. With a clear focus on long-term solutions, this partnership is an essential part of the country’s broader efforts to modernise its supply chain and position itself as a key player in global trade.