KARACHI, OCT, 10: Cargo handlers and freight forwarders facing problems while moving cargo, for import and export; they have to deal with seven ministries in sea, air, road and rail, they want one window operation.
Shipping services and all activities related to ports and terminals fall under the ministry of ports and shipping.
Ministry of commerce looked after the international, regional, multilateral and bilateral agreements and conventions regarding freight forwarding and logistics management.
Trucking, roads and highways comes under the business of the ministry of communication.
Trucking sector development plan is the responsibility of the ministry of industries. For all railway freight services, there is the involvement of ministry of railways.
Airports and air services fall under the ministry of defence. And, finally, customs, duties and levies are looked after by the ministry of finance.
For large-scale market players in the logistics sector, dealing with such a wide and diverse management profile is a huge issue and their plea for some sort of streamlining does not sound illogical.
Pakistan International Freight Forwarders Association (PIFFA), and Pakistan Ships Agents Association (PSAA), representing over 500 member companies, has been calling for putting in place one-window operation for at least inland transportation.
General Secretary of PIFFA while talking to reporters has put suggestions that all freight transportation and logistics matters should come under the single ministry, calling it the ‘ministry of freight transport, logistics and ports’.
Senior PIFFA member, Izharul Haq Qamar, regretted the government’s silence on an issue that was affecting the overall national trade. The standing committee set up by the commerce ministry, the National Trade and Transport Facilitation Committee (NTTFC), had been of little help despite having set targets that sound good on paper, he said.
Running his own cargo management business, Mr. Qamar said it was always tricky to quote a price to importers who want their goods moved beyond Karachi because of
fluctuating charges of inland transportation. “The fact is that the prices don’t actually fluctuate; they just keep going higher and higher,” he added.
Mr. Qamar giving details said that “A 20-foot container carrying about as many tons of cargo from Karachi to Lahore costs Rs60,000 today, but when it was quoted to the client four to five weeks earlier, it was much less. The same applies to the 40-foot container that today costs around Rs80, 000.”
PSAA members in their proposal that was sent to the ministry of commerce, the PSAA had even demanded privatisation of the National Logistics Cell (NLC) on the plea that the transport giant with little public accountability was actually a cause of distortion in the transport market.
The proposal accused the NLC of preventing the development of a healthy, organised private sector in the business, and suggested an end to all special treatment to NLC in terms of subsidies and in the award of business that was adding to its monopolistic hold on the market.
A document titled the National Trucking Policy was issued by the Engineering Development Board of the ministry of industries and production during the caretaker government of Mohammadmian Soomro in January 2008.
The document talked of the dire need to improve the sector “as our dependence on road freight is almost 96 per cent of the total ton/km and is growing fast”.
Quoting World Bank figures, it also estimated the losses “on account of inefficiencies in this sector” to be as high as Rs150 billion per year to the national economy.
Both PIFFA and PSAA have heard of that ‘trucking policy’, but have no idea what happened to the document beyond the 2008 elections. All they know is that nothing has changed on the ground.
Tahir Hussain, the PSAA Deputy Secretary, however, has hopes that the proposals under discussion with the NTTFC will bear fruit in the days ahead. One of the proposals relate to the expansion of warehousing facilities because limited and ineffective storage was increasing the cost of logistics.
The demand is in line with one of the project components of the NTTFC which talks of not just warehousing capacity, but also of creating “a well-functioning refrigerated produce cold chain for the storage and transport of temperature-controlled cargos”.
Ateequr Rahman, who runs a warehouse, said about two to three million square feet capacity had been erected in Karachi alone. “All this space relates to modern infrastructure and temperature-controlled.
Warehouses which are a far cry from converters and godowns of the past,” he adding that in the last year or so, there had been almost zero growth in this area because the “investors are probably shying away in spite of a quick three- to-four-year reimbursement time”.
The shortage of purpose built warehousing is so acute, he said, that the space that was earlier available for Rs12 per square foot per month has gone up to Rs20.
This, naturally, is adding to the cost of doing business for commercial enterprises which, in turn, have no other way to deal with it except to pass it on to the consumers.
Official documents available on websites of various ministries enhancing regional connectivity for improving links to Central Asian States, Iran, Afghanistan and India, and of focusing on the challenges arising out of the expanding trade regime across the National Trade Corridor.
Local stakeholders are waiting for things to happen on inter city routes that run across the country.
They are also awaiting progress on the ministry of commerce’s project related to the creation of a competent cross sectoral secretariat where trade and transport related problems that may affect more then two parties could be analysed.
Practical solutions developed and presented to the NTTFC for implementation and follow-up. This, they believe, would be the first step towards having a one-window facility sometime in the future.
Modern transportation and efficient logistics management reduce the cost of doing business and boost foreign trade. In their absence, goods produced for exports tend to become less competitive in the international market
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