Bangladesh stands at a strategic crossroads in South Asia with its extensive river network, burgeoning export base, and pressing logistics challenges, yet the full economic value of container transportation through waterway remains vastly underutilised.

Waterborne freight, especially so for containers, offers a transformative pathway that could cut logistics costs, reduce congestion on road networks, and increase national and regional trade competitiveness.

Bangladesh’s Container Movement is Road-Centric and Costly

Bangladesh’s major gateway for international cargo remains the Port of Chittagong, which handled approximately 3.29 million TEUs (Twenty Foot Equivalent Units) in the fiscal year 2024–25. Despite this high volume, 96% of containers are transported overland along the Dhaka–Chattogram Highway, only about 3% percent via rail and a mere 1% through waterways.

This overwhelming reliance on road transport imposes significant economic strain, contributing to congestion, wear and tear on critical infrastructure, frequent delays, and higher fuel and operational costs. Congestion alone has pushed freight expenses up by as much 35% along the key highway linking Chattogram and Dhaka. 

Why Container Transportation Through Waterway Can Be Cost-Effective? 

Waterway transport is widely regarded as the cheapest mode of freight movement in Bangladesh. According to reports from regional economic organisations, inland water transport (IWT) costs as little as Tk1 per kilometre per kilogram of goods, compared with Tk 2 for rail and Tk 4.5 for road transport. 

When applying these principles to containers, transporting a TEU between Chattogram and Dhaka via waterways costs roughly Tk 600 per tonne, versus Tk 1,200 by rail and Tk 6,000 by road. These figures reflect the potential for major cost reductions in freight logistics if waterborne container services are scaled. 

In broader macroeconomic terms, experts have suggested that an efficient inland water transport system could boost Bangladesh’s GDP by 1% and increase foreign trade by up to 20%, while cutting logistics costs significantly through more economical and environmentally friendly river routes. 

The Challenges Hindering Waterway Container Transport 

Despite clear cost advantages, numerous barriers hinder the growth of container transportation through waterway. Navigation and infrastructure constraints remain persistent. Many river channels lack adequate dredging and depth for heavy container barge traffic, especially in the dry season. River terminals and inland ports often lack modern handling equipment, limiting operational efficiency. Regulatory and institutional issues persist, such as fragmented coordination among authorities and unclear policy incentives for waterborne freight. In some cases, policy changes have inadvertently increased waterway freight rates, diminishing one of the core competitive advantages. 

One stark example is the sharp drop in activity on the Chattogram-Pangaon waterway route, where the number of ship movements declined significantly from 147 in 2023 to only 16 in a recent part of 2024 due to high freight rates and low adoption by shippers. 

Moreover, shippers frequently cite time inefficiencies. Water transport between Chattogram and Dhaka can take three to four days, compared with one day by road; this influences businesses that prioritise speed over cost, particularly in just-in-time industries like garments. 

Alternatives to Waterways: Road and Rail Carry the Load 

Road transport in Bangladesh clearly dominates container freight because it is faster and better connected to inland distribution points, even though it is costlier. The Dhaka-Chattogram highway bears heavy truck congestion and related cost escalation. Rail transport serves a larger share than waterways but still only accounts for around 3 percent of container movement, partly due to limited rolling stock, scheduling issues, and slower transit times relative to road freight. 

Both these alternatives remain vital, but they struggle to absorb growing trade volumes sustainably without significant infrastructure investments, and they contribute to environmental degradation through higher emissions. 

How Bangladesh Can Unlock Waterway Potential? 

The economic argument for scaling container transportation through waterway in Bangladesh is compelling, but realising that potential will require a coordinated strategy.

Improve river navigation through targeted dredging and modern signalling systems, ensuring all major routes are reliably navigable year-round. Upgrade inland ports and container terminals with modern cranes, storage yards, and integrated customs clearance systems to match the efficiency seen in road and rail intermodal hubs. 

Encourage public-private partnerships to develop container barges and river terminal infrastructure, reducing the capital burden on government budgets. Align regulatory frameworks and provide targeted incentives for shippers to shift volumes to waterways, such as tax breaks or reduced port charges for waterborne cargo. 

Enhance digital logistics platforms that integrate waterways with road and rail schedules, tracking container flows, and improving reliability and transparency for clients. Expansion of transboundary waterway agreements, such as with India under the Indo-Bangladesh Protocol Routes, can expand regional container barge services and support cross-border trade. 

What Neighbouring Countries Are Doing? 

Comparatively, Indian authorities have been actively promoting inland water transport as an economic and environmentally friendly freight mode, even though its modal share remains modest, estimated at less than 0.2%of total inland traffic. 

Projects such as National Waterways and multi-modal terminals are designed to enhance container and bulk freight flows in West Bengal and beyond, providing regional connectivity to Bangladesh and Nepal. 

Further regional examples include collaborative inland waterway services such as Maersk’s pilot project that moved 50 TEUs from Kolkata to a river port near Dhaka, demonstrating cross-border container transport potential between India and Bangladesh. 

Myanmar’s efforts under the Kaladan Multimodal Transit Project also exemplify how waterways, linked with road and maritime infrastructure, can expand trade by bypassing congested land corridors, with potential benefits for Bangladesh, northeast India, and coastal communities. 

Waterways Must Be Part of the Solution 

Bangladesh’s extensive river network is a latent economic asset that, if harnessed effectively for container transportation through waterway, could significantly cut logistics costs, reduce pressure on roads and rails, mitigate environmental impact, and strengthen regional trade ties.

Realising this potential will require strategic investments, regulatory reforms, and collaboration between public and private stakeholders. The payoff for both Bangladesh’s economy and its trading partners could be transformative, turning rivers from underused pathways into vital economic arteries.