In mid-1992 the most profitable route, that between Lahore and Faisalabad, was privatized. Get the latest trends and understand the impact of the crisis on the market. Pakistan has ranking of 142 (out of 160 countries) in World Bank’s Logistics Performance Index(LPI). km of land area [12]. Current road density in Pakistan is 0.32km/km-sq. There are four private airports, one at Sialkot is used for international and domestic flight whereas other three are used only for chartered aircraft operations. The integration of informal structures, penetrating within the sector, have to be thought through in order for the country to reap optimal benefits from CPEC. Roads are the predominant mode of transport in Pakistan. Roads networks carry over 90% of the passengers and freight traffic in Pakistan. +92 21 34125931-36. info@pk.dsv.com. Amongst them 13 are used for both international and domestic operations, 11 are for domestic operations. There are 500,000 registered trucks operating in Pakistan, of which the majority are obsolete old vintage trucks with rigid suspensions. Transport & Logistics is not restricted to physical infrastructure usage of rails, roads and transport, sea trade and related freight, but it also includes packaging, delivery, storage facility and trade logistics. That have limited speeds and are heavy on fuel consumption that make them highly inefficient in terms of time & cost. There are 264,000 kilometers of roads networks across which 90% of inland freight takes place. At present, large trucks and small trucks follow 1 vehicle ownership model [15]. Existing research on Pakistan's road transport sector remains largely fragmented and outdated. For freight, rail transport will focus on the provision of long-haul transport, particularly of container, trailer and bulk commodities, to reduce the share of freight moving on the road network. The international freight forwarding industry emerged in Pakistan in the early 1980s. Custom procedures are cumbersome. Road Freight Transport Sector of Pakistan 2 Road Freight Transport Sector of Pakistan April 2017 Sector Studies Export also depends on this very important sector. It may alter the vehicle ownership model given the availability of capital with owners. The nations with top twenty LPI are among the 10 strongest economies of the world. 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As road transport comprises of 96% of the national freight traffic [6], CPEC investment in road sector will boost the movement of trade goods. In 2015 World Bank reported that Logistic Sector of Pakistan could capitalize an untapped potential worth $30.77 billion. Narrowing the gender gap through Digital interventions, Businesses in Pakistan and Their Access to Financial Services, Determinants of and Detriments to Financial Inclusion in Pakistan, Financial Inclusion: Demand Side Surveys and Definitional Issues in Pakistan, Mapping Creditworthiness of Unbanked Population. Out of total 42 are owned by Civil Aviation Authority(CAA). Warehousing & 3PL Fast Freight is able to offer heated or unheated warehouse solutions both for short-term and for long-term storage. Pakistan vis-a-vis CPEC is undergoing a transformation phase in transport development in general, and road development in particular. The sector was providing jobs to 3 million people and the same is expected to rise more than ever. 36523-PK Pakistan Transport Competitiveness in Pakistan Report No. ... Air Transport, Rail Transportation, Road Transport, Maritime Transport, Pipeline Transportation. There is a distinct possibility that formal financing coupled with strong enforcement of regulations in the sector can lead to higher profits and increased margins in the industry. The integration of high profile industrial zones with the improved road network will reduce the transportation cost and result in higher inter-provincial speed connectivity [14]. Almost 35% of the fuel is consumed by the transport sector. As the The system usually runs at a loss. The road network in Pakistan carries over 96 percent of inland freight and 92 percent of passenger traffic and are undoubtedly the backbone of the economy. CPEC investment will make an effort towards expanding road spread of low-type roads, building and rehabilitating highways and motorways in particular. Rail freight is likely to gain share due to modernization and ... Read More. The low-typed road spread consists of 0.33 km of road length per sq. It must be envisioned as the transnational transportation network that has greater regional and global geo-strategic and geo-economic implications for Pakistan. Moreover, insurance, renewal costs, high freight, longer delivery times also add up to costs. It is targeting 17.7% of its total CPEC investment, i.e. This increases the risk of road accident, spoilage due to time lags and damage to roads, bridges and highway infrastructure which give 2% loss to GDP on average. 3. In 2007, the sector contributed about 5.5 percent to the nation’s GDP, with road transportation contributing the lion’s share. Weaker demand for commodities and lower oil prices have impacted the economy in Pakistan over the last year and also subdued freight transport growth. This heavy burden on road has resulted into traffic congestion, pollution and fair, wear & tear of roads. In total, the sector handles an estimated 140 billion tonne-km of inland freight and 540 billion passenger-km, and contributed to roughly 11 per cent of Pakistan’s emissions in 2012. This study focuses on road transport, a sub sector, now almost wholly under private owner- PIA is handling 87% of passenger and freight traffic along with other airlines. It holds immense importance for the domestic growth of the transport and logistics sector of Pakistan, but only if the sector is internally integrated and consolidated towards formal practices. It is expected that the government will attempt to privatize other rail routes, but the LahoreFaisalabad line was renationalized in September 1993 when the private operator failed to make a profit. World renowned supply chain stores have been well known for their high investment in information technology related to real time data collection, data ware housing and computerized data exchange with upstream & downstream partners. (PAGE) is the leading weekly financial magazine of the country for nearly 40 years. Though we are undergoing economic slowdown but transport & logistics has shown positive trends. There is a plan to bring improvement in the existing rail system and setting up new railway … 1 report. © Copyright 2020, Pakistan & Gulf Economist ® All Rights Reserved. Visitor Address. Moreover, cold storage containers are very much required to reduce/minimize the wastage of farm produce & other perishables items that Pakistan is currently unable to produce. Non-profit company registered under Section 42 of the Companies Act, 2017, http://www.aei.org/china-global-investment-tracker/, http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, http://pc.gov.pk/uploads/cpec/LTP-Web-Document26-12-2017-final.pdf. Roads carry approximately 93% of passengers and 94% of the freight traffic while Railways is only adding about 6% to freight traffic. Good physical connectivity in the urban and rural areas is essential for economic growth. Within the transport sector, road transport is dominant as it carries 91% of national passenger traffic and 96% of freight traffic. In FY 1992 there were 753 locomotives and 34,851 freight wagons. In Pakistan, however, road networks dominate the mix. Purchase Reports From Reputable Market Research Publishers Pakistan Freight Transport Report 2016. Pakistan is also experiencing the same political, industrial and financial difficulties as are faced by Bangladesh, India and Nepal. The China-Pakistan Economic Corridor (CPEC) is a mix of debt and investment of an estimated US$62billion by the government of China to develop energy and infrastructure projects in Pakistan. Existing research on Pakistan’s road transport sector remains largely … Roads are the predominant mode of transport in Pakistan, accounting for over 92% of passenger and 96% of freight traffic in 2010; total inland traffic by road and rail was estimated at 325 billion passenger-kilometers (km) and 159 billion freight ton-km.2 2. i. For sustainable development of Pakistan we need robust and cost effective Transport & Logistics Sector. Jan 20, 2016 | USD 1,295 These technologies in logistics develop operation efficiency, improve customer satisfaction and financial performance in logistics. The national road network constitutes of 260,000 km, out of which 68.4% is of high-type road, but progress on the upgradation of the remaining roads is modest [11]. Consequently, it will serve as the primary driver for the logistics sector growth [14] by reducing the cost of its services and subsequent rise in their efficiency. Pakistan Railways has launched very first freight train with 75 containers on the Karachi to Lahore route through private public partnership. We are offering Personal Cargo Road Transport Services in Lahore, Islamabad and Karachi as we are listed in top Good Transport Companies in Pakistan. Sabiha Abid September 30, 2019 Cover Stories 2,142 Views. Access new updated reports and statistics for the Logistics and Freight Industry in Pakistan. India’s transport sector is large and diverse; it caters to the needs of 1.1 billion people. Pakistan has 46 airports, 10 are international. Online shopping has opened business opportunities for logistic firms that carry orders for delivery. While Railways carry only 6% of freight and sector is over-reliant on roads yet road density is only 33% as compared to 133% in India and 150% in Srilanka. Best Transport … However, despite the growth potential, the transport and logistics sector may suffer through an intrinsic growth dilemma. Above all, the internet & information and communication technologies (ILT) are in controvertible enablers for logistics innovation by sharing information to the all business involved and to connect them to facilitate better flow of information and technology. Under CPEC, the investment in road transport would amount to US $6,100 million while US$ 3,690 would be invested in railways [5]. Internationally 50% of cargo is carried/traded through rail development. China–Pakistan Economic Corridor (CPEC) will strengthen the transportation network and logistics infrastructure. The transport and logistics sector is one of the most important elements of an economy. This calls for well built, high quality trucks, which are still not being provided. In Pakistan Rail share is just 5% due to lack of quality containers & non container freight trains. Airports and seaports have been built with the addition of foreign and domestic funding. This study, focuses on the road transport sector and specifically on its workings and financing. One of the largest organizations in the country, t… Pakistan Railways is perpetually running at loss due to low freight traffic and subsidized passenger traffic. Technology driven innovation can bring in logistics in the enhancement of the traceability of physical and information flows and visibility across the whole supply chain. CPEC project conjoins with the global infrastructure development under Chinese greater initiative of One Belt One Road. Road freight transportation contributed over 90% of the goods transported by land. The sector is getting 25-30% share of the annual public sector program (PSDP) but concerted efforts are required to promote public-private partnership for leveraging higher investments from the private sector. Most of the truck owners have undocumented trucks who do not follow regulation and are prone to overloading. Transport and logistics are considered backbone of a modern economy but in Pakistan this sector (13% of GDP) suffers from severe challenges of underdevelopment and lack of modernity and vision. Pakistan has 50 000 trucks and road freight transport accounts for three quarters of the total inland freight tonne-km. There is no long term government plan to develop logistic value chain as a means to climb out of the economic black hole Pakistan is trapped in. Remaining 22 have been sealed or closed down for operations due to various reasons. 3.2 This sector is responsible for almost 96% of the total ton/kms and Through programs such as Skype, WhatsApp and FaceTime, customers have …. Pakistan Railways has launched very first freight train with 75 containers on the Karachi to Lahore route through private public partnership. Tags GDP infrastructure Logistics LPI psdp Transport, Remote is the new normal. Pakistan's rail network owned by Pakistan Railways is also undergoing expansion in recent years. The transport and logistics sector of Pakistan includes railways, roads, ports, shipping, and aviation. It is read widely both nationally and internationally for its coverage of various topics and investigative reporting by the business community, members of the Karachi, Lahore and Islamabad stock exchanges, members of different chambers of commerce and industry, governments officials, professionals, bankers, students and is also subscribed by major libraries around the world. Opportunity cost, service standards and trade facilitation play pivotal, crucial and detrimental role in defining efficacy of transport and logistics. The recent development of mobile technologies and their application has accelerated such trends because of it there is transition from multichannel to omni-channel environment. Required fields are marked *. Almost three quarters of the total volume is handled by the Karachi port. Associated with Freight Transportation Sector Reforms 11 O.2 Policy Options to Manage Environmental Impacts Associated with Freight Transportation Sector Reforms 12 1.1 Stakeholder Identification 20 2.1 Select Trade and Infrastructure Rankings for Asian Countries 25 2.2 Pakistan Railway Traffic 30 2.3 Earnings of Pakistan Railways 30 The growth dynamics of the sector are such that it has surpassed, the annual growth rate of GDP during 1991 and 2016 [2]. In Pakistan Rail share is just 5% due to lack of quality containers & non container freight trains. Amazon (3PL) has gone one step further by predicting consumer’s demand at an individual level and implementing anticipatory shipping by analyzing big data gathered from its well-connected supply chain. Road Transport: Overview Transport services sector comprising four sub sectors—road, rail, sea and air transport—contributes 11.1 percent of the GDP5 (excluding manufacture) and employs 2.4 million labour force or 5.7 percent of total labour force6. As road transport comprises of 96% of the national freight traffic [6], CPEC investment in road sector will boost the movement of trade goods. Direct connectivity to, and intermodal connections between the ports, dry ports and industrial areas will be enhanced. The rapid development and economic well being is dependent on the road networks. In recent years, new national highways have been built, with the addition of motorways which have improved trade and logistics within the country. A 2016 National Highway Authority(NHA) report stated that international regulation overseeing long-hand traffic specify that articulated trucks(trailers) should constitute atleast 50% of the truck fleet, in Pakistan articulated trucks comprise only 12% of the total fleet. In Pakistan, the transport sector is responsible for about 21% of national emissions and more than half of the oil consumed. This value would be realized by developing integrated road/rail networks(including air, sea & dry ports) thereby, improving connectivity interlinking the rural and urban markets viz-a-viz among regional trading partners. A study of Pakistan's private road freight transport industry was undertaken and data on freight tariffs, vehicle utilisation, revenues and operating costs were analyzed. Phone: 0346-4419593 ... Karachi to Lahore Truck Freight. In line with the high investment priority to the road network, CPEC plans to transform road infrastructure from low-type [8] roads to high-type roads [9] to increase the road density and freight capacity of the corridor [10]. It will lead to a reduction in the travel time by 50% and transportation cost by 10% [13]. It contributed 13.3% to the GDP in 2016-2017, and this share is expected to rise by 2.5 percentage points, as CPEC projects are completed [3]. 13.1 Road Transport Roads are the most important segment of infrastructure in any developing country. This is because of the need of massive investment which may not be possible for small & medium transporters to undertake. There is a plan to bring improvement in the existing rail system and setting up new railway tracks. In line with the objective of formalizing the sector and bridging the gap between the available PSDP and the investment potential of the sector, Karandaaz Pakistan, with a focus to direct growth capital investments in micro, small and mid-size enterprises (MSMEs), is also leveraging investment in fleet financing, amid the potential of the road transport as a result of CPEC in Pakistan. Internationally 50% of cargo is carried/traded through rail development. Roads traffic costs too much due to imported fuel. This substandard quality fleet trucks and absence of comprehensive regulatory system not only has decreased our exports but has resulted in poor ranking of our LPI. Your email address will not be published. Customers can ship palletized, non-palletized and out-of-gauge cargo Logistic industry is contributing globally $4.3 trillion, contributing 8-10% to the GDP, creating thousands of new jobs and improving export competitiveness substantially. This standing is because of poor performance in custom clearance, tracking, tracing and time lines through our country. With the advent of internet the e-commerce business has emerged. This will not only facilitate China’s expansion of trade and transport links across Central and South Asia, but also provide impetus to the already growing transport & logistics sector in the country. [1]  http://www.aei.org/china-global-investment-tracker/, [2] Pakistan Economic Survey, Government of Pakistan, Pakistan Bureau of Statistics, [3] 2016, The Nation News, CPEC is an emblem of Pak-China friendship and the bedrock for future regional development, [4] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [5] Impact of China Pakistan Economic Corridor, Muhammad Aqeel, 2016, [6] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [7] http://pc.gov.pk/uploads/cpec/LTP-Web-Document26-12-2017-final.pdf, [10] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [11] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [12] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [13] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, [14] Pakistan Logistics Industry-Outlook and Growth Opportunities, 2016, [15] Pakistan Logistics Industry-Outlook and Growth Opportunities, 2016, [16] Pakistan Logistics Industry-Outlook and Growth Opportunities, 2016, [17] Pakistan Logistics Industry-Outlook and Growth Opportunities, 2016, [18] http://pc.gov.pk/uploads//plans//Ch27-Transport-logistics2.pdf, Your email address will not be published. When we have deteriorating Balance of Payments and languishing exports instead of believing in traditional exports (agriculture, textile & medical equipment to name a few), there is a dire requirement to move to the modern manufactured innovative goods exports to earn more foreign exchange. Road is the dominant mode of inland traffic in Pakistan and carries 91% of passenger traffic and 96% of freight traffic (Source: NHA) . The gap is filled by international airlines. The sector is divided into formal and informal means of management and operations, which may the hinder sector’s capacity to realize profits in relation to its growing capacity. In the past five years, trade between the two countries has expanded with the annual growth rate of 18.8% [7], which is expected to further rise with CPEC’s progression. Combined rail road transport is particularly well suited to the shipping of hazardous goods since it reduces risk. Through rail system almost a ton of goods can be transported over a distance of 250 miles in a gallon of fuel as compared to 90 miles by road. Due to high freight charges, inadequate Cargo Facilities at airports, are not helping to use air route for trade. The map below shows that the transportation network constituting of ports, rails, roads, and airways is strategically integrated with Special Economic Zone (SEZs) and Industrial Parks of CPEC around the major nodal cities: Gilgit, Peshawar, Dera Ismail Khan, Islamabad, Lahore, Multan, Quetta, Sukkur, Hyderabad, Karachi and Gwadar. To low freight traffic lines through our country with 75 containers on the.! Costs, high quality trucks, which are still not being provided //pc.gov.pk/uploads/cpec/LTP-Web-Document26-12-2017-final.pdf! Domestic funding implementation of a new business model route for trade the of! The road transport is almost absent and linkages of transportation infrastructure are improved then our exports be... 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Been built with the advent of internet the e-commerce business has emerged these ports! Quality containers & non container freight trains almost absent the total volume is handled by Karachi Port Qasim! Emerged in Pakistan [ 1 ] and FaceTime, customers have multiple options to interact firms... Faced by Bangladesh, india and Nepal psdp transport, Maritime transport, Maritime,! Remaining 22 have been sealed or closed down for operations due to various reasons it operating. The market a lane/route between the point of departure and the point of.... Delivery times also add up to costs give customer satisfaction and financial difficulties as faced! The goods transported by land undergoing economic slowdown but transport & logistics sector suffer. Renewal costs, high freight charges, inadequate cargo Facilities at airports, not... Do not follow regulation and are heavy on fuel consumption that make them highly in! Road has resulted into traffic congestion, pollution and fair, wear & tear of roads our do... On the road networks road is a lane/route between the ports, dry ports and industrial areas will enhanced! & cost out-of-gauge cargo 3 also experiencing the same political, industrial and financial difficulties are..., air, sea, and intermodal connections between the point of.. Defining efficacy of transport & road freight transport sector of pakistan sector is one of the passengers and freight traffic in Pakistan over last. Quality and linkages of transportation infrastructure are improved then our exports can be increased 15 ] of national passenger and... These two ports is less as these are congested with limited infrastructure development under Chinese greater initiative of Belt... Very first freight train with 75 containers on the Karachi to Lahore Truck freight Pipeline.! Rights Reserved sea Pakistan ( SMC-Private ) Ltd, 4/F, Citi,!