Cement body urges govt to stop implementation of axle load regime

The All Pakistan Cement Manufacturer Association (APCMA) has urged the federal government to immediately stop the implementation of axle load regime, saying that the action carries dire consequences for the economy of Pakistan.

Axle load refers to the total weight bearing of a wheeled vehicle on the road for all wheels attached to a given axle.

In a letter addressing Dr Ejaz Gohar, Caretaker Minister for Commerce, dated October 30, APCMA stated: “We write with utmost concern and apprehension in response to the recent imposition of the axle load regime, an action that carries distressing consequences for the economy of Pakistan.”

The statement is in relation to the government’s decision to enforce the axle load control regime without relaxation from November 15, 2023.

APCMA highlighted that back in 2019, when the government had abruptly implemented the axle load regime, the cost of essential commodities increased by Rs 154 billion ($0.55 billion) as a direct consequence of a sudden change in the axle load regime.

“The implementation of the new axle load regime significantly reduces the lifting capacity of each truck (40% on 22-wheelers and 100% on 10-wheelers). This will undoubtedly contribute to a 50% to 60% increase in the freight costs, ultimately around $2 billion on fuel alone,” said APCMA.

Moreover, the decision will lead to a reduction in foreign exchange inflow, it said.

“Export activities will be adversely affected in two ways: a. Inland freight costs for export goods will rise, making Pakistani exports less competitive in the global market.

“b. A very large portion of exports are made in 20-foot containers, which are currently loaded with 28 tons per container. With the axle load restriction this container will carry only 14 tons which shall double the sea freights, making Pakistani exports unviable,” it said.

APCMA said the implementation of axle load will make Pakistani exports uncompetitive and unviable.

On the other hand, the reduction in axle load limits will lead to a substantial increase in foreign exchange outflow due to higher expenses in the form of increased POL expense, and a surge in the import of trucks to meet the increased demand.

“The reduction in lifting capacity of trucks will inevitably result in a substantial increase in freight expenses, amounting to approximately $1.75 billion (equivalent to 3.5% of the overall import costs),” it said.

APCMA shared that the cement industry of Pakistan is importing 6 to 7 million tons of coal annually.

“The implementation of axle load restrictions will double the cost of freight for both incoming raw materials and outgoing finished products. With the implementation of axle load, cement prices will go up by Rs40 to Rs50 per bag,” said APCMA.

The body urged the authorities to “immediately stop the implementation of axle load regime.

“A separate concrete lane should be added to the Motorways and highways and funded by increasing the toll on trucks.

“Till such time that the additional lane is ready, the current practice of axle load may be allowed and the higher maintenance cost be compensated through an increase in the toll of all vehicles (not only trucks),” it said.