BAFFA Argues Against 100% Foreign Ownership In Bangladesh Freight Forwarding

🚢 The Bangladesh Freight Forwarders Association (BAFFA) has urged the government not to expand 100 percent foreign ownership in the country's freight forwarding sector without assessing its economic impact. The association said freight forwarding is predominantly a service-based industry rather than a capital-intensive sector and raised the question of whether allowing unrestricted foreign ownership would bring substantial fresh foreign direct investment, technology transfer or new employment to Bangladesh.

📊 BAFFA's concerns came amid renewed regulatory attention to foreign-owned freight forwarding companies. On September 8, the National Board of Revenue (NBR) issued a clarification regarding the renewal of licences of fully foreign-owned companies that had received licences before July 1, 2015, under the Freight Forwarding Agents Licensing and Operations Rules, 2008. BAFFA recently sent a letter to the NBR and the Prime Minister's Office arguing against allowing 100 percent foreign ownership in the freight forwarding sector.

📜 BAFFA's Position: Assessment Before Policy Change

In the letters, BAFFA said any broader policy change should therefore be preceded by a comprehensive economic impact assessment and meaningful consultation with local industry stakeholders. Local freight forwarders have spent more than three decades developing expertise, international agency networks and logistics capabilities that support Bangladesh's import and export trade, BAFFA said in the letters.

• 🏛 Association: BAFFA (Bangladesh Freight Forwarders Association)
• 📜 Letters sent to: NBR + Prime Minister's Office
• 📅 NBR clarification date: September 8
• 📜 Regulation: Freight Forwarding Agents Licensing and Operations Rules, 2008
• 📅 Pre-2015 licence cutoff: July 1, 2015
• 👥 Sector composition: Predominantly local SMEs

👥 Service-Based Industry, Not Capital-Intensive

The sector includes a large number of locally owned small and medium enterprises that coordinate international transportation, cargo consolidation, documentation, customs-related processes, supply chain management and other trade facilitation services. BAFFA warned that allowing financially stronger multinational operators unrestricted access without appropriate regulatory safeguards could create an uneven competitive environment for domestic SMEs and potentially shift a greater share of locally generated logistics income abroad.

The distinction between service-based and capital-intensive industries is strategically important. In capital-intensive sectors (ports, terminals, container depots), foreign investment brings tangible assets — physical infrastructure, equipment, technology — that expand the country's productive capacity. In service-based sectors like freight forwarding, foreign investment primarily brings competitive pressure on existing local players without necessarily adding new capacity. The economic case for unrestricted foreign ownership is therefore different in freight forwarding than in logistics infrastructure.

🤝 Not Opposition To Foreign Investment

The association stressed, however, that its position should not be interpreted as opposition to foreign investment. BAFFA said Bangladesh needs substantial foreign investment in logistics, but such investment should preferably be directed towards areas where fresh capital, infrastructure, technology and capacity are genuinely required. These include ports and terminals, inland container depots, multimodal logistics hubs, modern warehousing, cold chain facilities, air cargo infrastructure, automation and digital logistics systems, the letters also read.

The sectoral targeting approach — welcoming foreign investment in infrastructure-heavy logistics while protecting the service-based freight forwarding segment — reflects a nuanced industrial policy perspective. Bangladesh's logistics infrastructure gaps (cold chain, modern warehousing, multimodal hubs) are well-documented and represent genuine areas where foreign capital and technology can add productive capacity. Freight forwarding, by contrast, is a mature service sector where local firms have built competitive capabilities over three decades.

🌏 Strategic Context: Trade Facilitation And Export Competitiveness

For Bangladesh's broader trade facilitation agenda, the BAFFA position carries strategic significance. Freight forwarders are the critical intermediaries in international trade — they coordinate the movement of goods from factory to port, from port to vessel, and from destination port to buyer's warehouse. Bangladesh's export economy, which generates over $48 billion in annual merchandise exports, depends on the efficiency and competitiveness of the freight forwarding sector to maintain delivery timelines and control logistics costs.

If unrestricted foreign ownership leads to consolidation of the freight forwarding sector under multinational control, Bangladesh's exporters could face higher logistics costs as multinational forwarders extract profits from the local market. Conversely, if the sector remains dominated by local SMEs without adequate modernisation, Bangladesh's logistics efficiency may lag behind regional competitors. The optimal policy — as BAFFA implicitly suggests — is to protect local freight forwarders while channeling foreign investment into the logistics infrastructure that supports them.

The coming months will reveal whether the NBR and the PM's Office respond to BAFFA's call for an economic impact assessment — or whether the regulatory clarification on pre-2015 foreign-owned licences becomes a stepping stone toward broader liberalisation of the freight forwarding sector. For Bangladesh's export community, the outcome will directly affect the cost and efficiency of the trade logistics that underpin the country's export competitiveness.