There is no denying the fact that a robust logistics system is sine qua none for the growth of economy. The entire cycle of industrial production is dependent on efficient logistics network which in simple terms means availability of right product at right time and at right cost from origin of production to end consumers. In Pakistan, logistics contributes 13% towards GDP and 5.4 % of job market share.
Notwithstanding its immense significance, the logistics industry of the country is largely underdeveloped and in dire need of reforms. The rail freight has lost competitiveness resulting in over reliance on road mode. The road freight on the other hand is highly fragmented. It comprises only a small percentage of large fleet operators. An overwhelming 85% of road freight is being operated by owners having old vintage trucks with rigid suspension. To make up for high fuel and maintenance costs of these obsolete vehicles, transporters resort to overloading that in turn causes serious damages to road network. The inland waterways have yet to be explored for freight movement. Airlines prefer passengers over cargo. Warehousing particularly cold storages are insufficient leading to heavy losses of perishable goods. The situation has further been compounded by lack of a dedicated ministry for logistics and transport to regulate the sector and provide enabling environment for its growth.
In line with National Freight & Logistics Policy, NLC has implemented an ambitious modernization programme focusing on upgradation of fleet, automation & digitalization of processes and improvement in efficiencies through carefully crafted KPIs. The end objective of the exercise was to transform NLC into a multimodal logistics organization capable of providing end-to-end solutions to its clients. Through an aggressive induction plan, the fleet has been upgraded with most modern prime movers suitable to all terrains and climatic conditions of the country. It can be safely claimed that NLC is leading the logistics sector with latest and most reliable fleet fully compliant to the standards of OGRA, NHA and other regulatory bodies.
The transportation operation is being conducted through an effective Fleet Management Control Room. Likewise, to give visibility to its valued customers, NLC introduced tracking and monitoring of fleet about two decades ago. Enterprise Resource Planning (ERP) system has been implemented across various Strategic Business Units (SBUs) of the organization for collection, integration, management and interpretation of data to improve performance at various tiers. Recently, NLC Smart Solutions has been set up as fully owned subsidiary that offers state-of-art software solutions, tracking & tracing of vehicles and assets among other Internet of Things (IoT) services to government as well as private sector.
Adding the sea & air freight dimensions to NLC portfolio, Marine & Air Services (MAS) provides comprehensive logistics solutions to the business community. Through its established links with international principals/agents, MAS offers a wide range of services including but not limited to international freight forwarding, ship chartering, stevedoring, project cargo handling, warehousing & distribution, consolidation services, LCL export / import shipments, bonded container movement, cross border trucking and air freight services etc. MAS has created a reasonable space in the realm of air and sea transportation in a short span of time.
Warehousing is a largely neglected area in value chain. Almost 40% of perishable goods are lost due to lack of proper cold storages. In view of huge potential, NLC is coming up with logistics parks and warehousing on CPEC routes as well as national highways in close proximity of Special Economic Zones (SEZs).
Located at the confluence of major trade routes, Pakistan can play a pivotal role in integration of regional economies by facilitating trans-border trade. Border Terminals being one of the most important facets of regional connectivity, have been established at Wahga, Torkham, Kharlachi, Ghulam Kahan, Chaman and Taftan by NLC. Additional border terminals are being developed at Angoor Adda in South Waziristan and Gabd with Iranian border. NLC is also working on Integrated Transit Trade Management System (ITTMS), a flagship project to improve border facilities at Torkham and Chaman border terminals. The project is part of Central Asian Regional Economic Cooperation – Regional Improving Border Services (CAREC-RIBS) corridor programme and has been funded by Asian Development Bank. ITTMS will provide state-of-the-art facilities for regional trade thus opening new vistas of economic development in entire region.
The world is exploring various instruments of economic diversification and increase in exports. The real challenge, however, lies in ensuring smooth, free and predictable flow of trade across the borders. TIR offers the most viable solution to overcome these challenges as it establishes an international customs transit system for shipment of bonded cargo while doing away with time consuming checks at borders and other lengthy processes. NLC is taking sincere efforts to make TIR fully functional and connect Pakistani exporters to the hitherto untapped markets in the region particularly those of the Central Asian Republics (CARs). In addition to ensuring smooth border crossing of cargo of other companies at border terminals, NLC has successfully completed first commercial run to Turkey and Azerbiajan under TIR. The landmark initiative will encourage other logistics companies to undertake similar ventures to new destinations. The ultimate beneficiary of TIR’s actualization will indeed be the industries of Pakistan in shape of connectivity to new regional markets.
Presently, the logistics sector is faced with plethora of challenges which will be further overburdened with massive loads likely to be generated in the wake of CPEC led industrialization and re-location of Chinese industries to SEZs. The solution lies in modernization of logistics, creating intermodal balance, enhanced connectivity with business hubs, implementation of IT enabled seamless practices, simplification of institutional framework governing the sector and linkages of academia / training institutions with industry as enunciated in the National Freight and Logistics Policy. NLC in its own capacity is taking measures towards modernization. The real difference will, however, be made only if all stakeholders take collective efforts for improving the efficiencies of logistics sector.
SYED MUSHTAQ AHMAD
Copyright Business Recorder, 2022
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