Before We Raise Wages, Look at the Ship: Why Bangladesh Already Loses to China and Indonesia?

I have proposed earlier a 3-Zone Minimum Wage – Tk 15,250 / 14,000 / 13,125 – as a fair and sustainable alternative to the Tk 32,000 demand.

Some will ask: why can China and Indonesia pay higher wages, but Bangladesh cannot?
The answer is simple: Bangladesh does not compete on equal terms. Even before wages are paid, Bangladesh already pays more to reach the buyer.

Bangladesh Has No Deep Sea Port — This Is Our Biggest Disadvantage China has Shanghai, Shenzhen, Ningbo – deep sea ports where giant mother vessels berth directly. Indonesia has Jakarta /Surabaya – deep sea ports.

Bangladesh has no deep sea port. Chattogram Port is shallow. It cannot take mother vessels.
So every container from Chattogram must first go by small feeder vessel to a deep sea port in Malaysia – Port Klang, or Singapore, then transfer to a large mother vessel to America and Europe.

That means double handling – load in Chattogram, unload in Singapore /Port Klang, load again. Double port charges, Double waiting time, Double risk of missing the mother vessel.

China loads once and sails. Bangladesh loads twice to reach the same buyer.
Shipping Time to USA and Europe — Bangladesh Is Always Longer
Because of this feeder transshipment, our time is always longer:

-Bangladesh to USA: 25-42 days by ocean
– China to USA: 14-30 days
Bangladesh to Europe is also longer, for the same reason — feeder to Singapore / Port Klang first, then long voyage via Suez.

A buyer who needs goods for Christmas or summer season cannot wait 2-3 weeks extra. If Bangladesh is late, buyer cancels or shifts order to Vietnam / Indonesia where delivery is faster.

Until Matarbari Deep Sea Port is fully operational, Bangladesh will always be at this disadvantage.
Shipping Cost — Bangladesh Pays More

Because we pay feeder mother vessel double port charges, freight spikes hit us hardest.
In recent months, freight from Chattogram to USA jumped from $4,500 per container to more than $11,000. In October 2026, a 20-foot container Chattogram to New York was quoted at up to $11,800, and a 40-foot at up to $12,900. The same period, Chattogram to Hamburg / Rotterdam was only $3,000 for 20-foot and $4,586 for 40-foot.

In other words, shipping to America costs Bangladesh 3 to 4 times more than shipping to Europe. Our competitors in China and Indonesia do not face this same penalty.

Bangladesh Imports Almost Everything, Competitors Do Not
China makes its own fabric, yarn, buttons, zippers, and machinery. Indonesia has its own textile base.
Bangladesh must import 80% of its woven fabric, chemicals, and accessories, pay import duty, port charges, and bank charges, then re-export. Every delay at Chattogram port adds cost. Every day of feeder delay adds cost.

Energy, Finance, and Lead Time
Gas and electricity supply is uncertain. Bank interest in Bangladesh is far higher than in China, Vietnam, or Indonesia. Working capital for 90-120 days of import-to-export cycle costs more here.

Because of transshipment port congestion, lead time is 2-3 weeks longer. Buyers penalize late delivery.
Cheap Labour Is Our Only Advantage Left — If We Lose It, We Lose Everything
Let us be honest.

China has deep sea ports, full supply chain, technology, fast delivery, cheap finance. Indonesia has deep sea ports, raw materials, faster delivery. Vietnam has deep sea ports, FDI, technology, stable energy.
What does Bangladesh have?

No deep sea port. No own fabric / raw materials. Slow shipping. Expensive freight. High bank interest, gas shortage, port congestion, long lead time.

We have only one advantage left: cheap labour.
If we take away that one advantage by raising wages to Tk 32,000 — then why will a buyer come to Bangladesh?

Buyer will say: _“Why should I pay Bangladesh high wage high shipping slow delivery, when I can go to China / Indonesia / Vietnam and get high wage low shipping fast delivery?”
Then orders will go. Factories will close. Workers will lose jobs. Not in 10 years — in 1-2 years.
No Enough Electricity — Factory Runs on Generator, Cost Is Very High
China, Indonesia, Vietnam have stable power. Their factories run on grid electricity, 24 hours, without interruption.

Bangladesh does not have enough electricity. Load shedding, low voltage, gas shortage for power plants — this is daily reality in Dhaka, Chattogram, Gazipur, Narayanganj.

So what must a factory owner do? He cannot stop the sewing machines when buyer order is urgent. He must arrange a generator.

Zone System Will Free Dhaka to Become a High-Income City
Right now, Dhaka is crowded with garment factories. Because wages are the same everywhere, factories have no reason to leave Dhaka. So Dhaka becomes congested, polluted, expensive, traffic jam, gas shortage, electricity shortage.

But with a Zone system:
– Dhaka, Chattogram – Higher wage – Tk 15,250
– Rural areas – Lower wage – Tk 13,125
Then labour-intensive, high-density production will move outside Dhaka, to Rangpur, Dinajpur, Rajshahi, Barisal, Khulna, where land is cheaper, rent is cheaper, workers live at home, and wages are lower.
And Dhaka will be free.

Dhaka can then become a high-income city, like Singapore, like Bangalore, like Kuala Lumpur.
In Dhaka we can do: Programming / Software, AI / IT services, E-commerce headquarters, Design, Buying Houses, Fashion Design, Finance, Banking, Marketing.

This is how every developed country did it. First they moved low-wage factories out of the capital, and then they brought high-income industries into the capital.

Air Shipment Cost Is Also Very High — Compared to China and Indonesia
When sea shipment is late — because of feeder delay, port congestion, or Red Sea crisis — the factory has no choice. It must send goods by air to meet buyer’s deadline. And air from Bangladesh is extremely expensive.

Dhaka’s Hazrat Shahjalal International Airport is described by freight forwarders as one of the most expensive cargo airports in the world, even more expensive than Singapore. Exporters pay high terminal handling charge to Biman, high security scanning charge to CAAB, plus VAT and ground handling surcharge.

Keep Labour Cost Cheap, Let Market Supply and Demand Decide — Not Government Force
When unemployment rate is low — when factories are competing for workers, when there are more jobs than workers — then wages will go up by themselves. Workers will get higher pay because factories must pay more to attract them. That is natural, healthy, sustainable wage growth. That is how China, Vietnam, and Korea grew.

Do Not Kill the Goose That Lays the Golden Egg
Bangladesh’s RMG sector employs 4 million workers, earns 80% of export earnings, and supports 10% of GDP. It survived because our total landed cost was competitive, even with low wages.

If we raise wages to a level that makes our landed cost higher than China and Indonesia, buyers will leave. Not slowly — quickly. As we saw in the Philippines, 50,000 garment jobs were lost in 3 years when costs became uncompetitive.

That is why I proposed a 3-Zone system with 5% yearly increment on Basic only. It gives workers a real increase, without making Bangladesh lose the shipping war.

Let us be fair to workers, but let us also be honest about Bangladesh’s disadvantages. A wage we cannot afford will not help workers — it will make them jobless.

I urge the 8th Minimum Wage Board to consider not only the wage, but the full cost of doing business in Bangladesh, before deciding on 16 November.

(Writer: Former Senior Research Fellow, BIDS)