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Business Recorder
02-07-2025
- Business
- Business Recorder
Unlocking Pakistan's Logistics Potential on National Logistics Day
TEXT: As we mark National Logistics Day, it is time to reflect on the backbone of Pakistan's economy — the logistics and transportation sector — and to chart a path forward. Currently, this sector contributes over 12% of GDP and employs 6% of the country's workforce, handling 98% of Pakistan's transportation needs. Yet, despite its significance, Pakistan's road logistics sector is mired in inefficiency, underinvestment, and outdated governance frameworks. The latest Pakistan Business Council (PBC) report 'Pakistan Road Logistics, Challenges, Opportunities and Policy Response'-2025 paints a sobering picture: Pakistan's Logistics Performance Index (LPI) has dropped from 2.42 in 2018 to 2.3 in 2025, ranking far behind regional countries India (rank 44), Iran (100), and Bangladesh (64). The above report echoes the same policy recommendations as detailed in this article in its 'Prioritized Recommendations'. The lack of an integrated national transport policy and a dedicated Ministry of Transport and Logistics has hampered coordinated action. Responsibilities are fragmented across federal, provincial, and quasi-government entities, leading to poor planning and execution. This structural weakness allows informal operators, backed by politically influential sectors to evade regulations — further distorting the market and discouraging formal players. In the PBC Report: 'Dedicated Ministry or Focal Authority for the Logistics Sector: It is important to realize that logistics is an interconnected sector, and one mode is not independent of the other. Therefore, a focused approach is required to help the sector grow. One glaring issue is the non-implementation of Axle Load regulations. Overloading is a major cause of premature road infrastructure failure and road accidents. The World Bank estimates that road accidents cost Pakistan 4.5% of GDP, equivalent to $12.5 billion annually. Strict enforcement of Axle Load laws, including vehicle impoundment and cargo seizure for violations, is essential to safeguard both infrastructure and lives. In the PBC Report: 'Axle Load Enforcement: 1) Strengthen Regulations: Enforce axle load limits uniformly across all regions to minimize road damage and extend infrastructure lifespan. 2) Monitoring and Penalties: Implement weighbridges equipped with automated systems for accurate load monitoring and impose strict penalties for violations'. Despite the best intentions, investments in Pakistan's motorways have largely failed to deliver their intended economic benefits. Many motorways built under BOT arrangements either prohibit overloaded trucks—to protect the infrastructure for which investors are liable—or allow such vehicles, resulting in severe damage and escalating repair costs (major maintenance now required in the second year, instead of the seventh). The motorway network has thus become a white elephant, unable to service its debts or justify the public and private investments made. Motorways cannot be financially viable on passenger traffic alone. Their full commercial and economic potential depends on carrying freight traffic. Yet freight operators avoid these roads, preferring to run overloaded on national highways where axle load limits are not enforced—causing massive damage to both highway infrastructure and the public exchequer. Another pressing need is the modernization of Pakistan's trucking fleet. With only 300,649 registered trucks — compared to India's 12.5 million — the sector suffers from outdated, fuel-inefficient vehicles that raise costs, emissions, and road safety risks. The PBC recommends developing green financing tools to support fleet renewal with Euro-5 compliant and electric vehicles, a move that would also align with emerging global climate regulations like the EU Green Deal. In the Pakistan Business Council Report: 'Fleet Modernization and Financing: Expand Access to Credit: Develop low-interest loan schemes and financial products tailored to small and medium-sized operators, enabling them to upgrade their fleets'. The logistics firms are under immense pressure of excessive rate of taxes, the federal government's recent decision in the 2025-2026 budget to increase the withholding tax on logistics services from 4% to 6%. The 6% on revenue translates to more that 50% of the thin profit margin in this sector. Normal tax rate for companies is about 29% of the profit in Pakistan for other businesses. Even 4% was excessive than 29%. This decision, if implemented, will deal a devastating blow to the service sector — particularly to an already struggling goods transport industry that plays a critical role in Pakistan's economy. This increase will push small and medium-sized transporters out of the formal tax net in a desperate attempt to keep their businesses afloat. This will inevitably undermining both government revenue collection and the rule of law. Roadside security is another concern. Roadside robberies and thefts pose serious risks, particularly in key bottleneck areas. The government must step up security patrols and protect the lifelines of our economy. The path forward is clear: • Enforce Axle Load limits strictly • Provide targeted green financing for fleet upgrades • Establish a unified Ministry of Transport and Logistics to drive reforms • Set a supporting Rate of Tax to logistics, similar to other businesses and industries. By tackling these issues with urgency, Pakistan can transform its logistics sector into a regional powerhouse — supporting exports, creating jobs, and enhancing national competitiveness. On this National Logistics Day, let us commit to unlocking the sector's full potential. RanaAsimShakoor Chairman, FOAP Copyright Business Recorder, 2025
Mint
25-06-2025
- Business
- Mint
Export thrust: India should move goods like a horse to trade like a tiger
India's merchandise exports grew by a significant 39% from $317.5 billion in 2014 to $441.7 billion in 2024. This rise in exports testifies to India's ambition of positioning itself as a global manufacturing and export powerhouse. Flagship government schemes, such as production-linked incentives (PLI), Make in India and the Phased Manufacturing Programme have played a vital role in India's export thrust. The 'trading across borders' indicator from the World Bank's 2020 Doing Business data-set showed that exporting from India took significant time and money. On average, border procedures alone took 52 hours and $212 per container. Export documentation consumed 12 hours and $58. Importing took even more—with around 65 hours and $266 needed for border clearance, and 20 hours and $100 for documentation. In comparison, China was processing the same export shipments within 21 hours at a slightly higher cost of $256 per container. It processed documents faster too, in 9 hours on average, although the documentation cost is $74, slightly higher than in India. Also Read: IMEC jinx: There's no relief in sight from war clouds over this trade route India was better placed than the likes of Bangladesh and Vietnam, but behind countries like South Korea, which was the world leader on those counts. South Korea was doing border checks in just 13 hours at a cost of $185, and document processing in 1 hour for only $11. All these numbers showed the gap India needed to cover in competition with the world's best export performers. While Doing Business data is old and the World Bank has discontinued this study, its broad 2020 rankings may not have changed very much (except in Vietnam's case perhaps). More recent data from the World Bank's Logistics Performance Index (LPI) offers us another picture. This index tracks the transportation of goods within and between countries, taking into account six measures: customs efficiency, infrastructure, ease of coordinating international shipments, logistics quality, tracking and tracing ability, and punctuality (frequency of on-time shipments). As reported by the 2023 LPI report, India has taken significant strides on logistics, moving its world ranking from No. 54 in 2014 to No. 38 in 2023, with its score rising from 3.08 to 3.4. Its ranking on timeliness rose from No. 51 to No. 35, and its score for logistics competence and quality rose from 52 to 38, signifying higher professionalism and reliability in freight services. Moreover, in terms of infrastructure (covering ports, roads and railways), India's rank rose from No. 58 to No. 47, reflecting the impact of recent investments in physical logistical infrastructure. Still, China is ahead of India on an absolute basis, at 19th place with a score of 3.7. It scores better on all the key factors: timeliness, quality of logistics and impressively on infrastructure, indicating the strength and dependability of its supply chain mechanisms. India's progress is heartening. Yet, continued efforts are needed to reach the logistics performance of global leaders. Also Read: Our trade ambitions should make us look across as many seas as we can India has also achieved impressive reductions in 'dwell time'—the number of days that cargo is held at a terminal or port before it can proceed. In the LPI 2023 report, while 4 to 8 days is the typical dwell time for economies at every level of income, India is on par with Singapore with a dwell time of only 3 days. This is an achievement ahead of the UAE, South Africa, US and Germany, indicative of improved coordination between customs officials, port authorities and logistics firms. Underpinning these efficiency gains is India's massive investment in transport and logistics infrastructure. The coverage of National Highways (NH) increased from 65,569km in 2004 to 146,145km in 2024, with four and more lane stretches rising 2.6 times since 2014. The construction tempo has picked up sharply, from 12.1km per day in 2014-15 to 33.8km per day in 2023-24. Flagship programmes such as the Bharatmala Pariyojana launched in 2017, are developing 26,000km of economic corridors, ring roads, bypasses and elevated corridors to ease city congestion and enhance freight movement. As of November 2024, 18,926km of roads had been constructed under this scheme. Also Read: The time is right for a reset of India's trade ties with China Apart from this, 35 multimodal logistics parks are also being built under the Bharatmala plan, with an aggregate outlay of ₹46,000 crore. On commissioning, these parks will be capable of transporting 700 million metric tonnes of cargo, increasing India's capacity to integrate various modes of transport in a cost-effective manner. India's port cargo handling capacity has nearly doubled from 800.5 million tonnes annually in 2014 to 1,630 million tonnes in 2024, an increase of 87%. India has also climbed in terms of its world ranking in shipments, from No. 44 in 2014 to No. 22 in 2023. Concurrently, the turnaround time (TRT) at major ports—the time that ships spend at port—has declined significantly from 94 hours in 2013-14 to 48.06 hours in 2023–24. Average berth-day production has gone up by 52% and India is also seeing increased tourism through cruise terminals and lighthouse sites. Also Read: India could learn much from the complaints of its trade partners These reforms can be said to represent a paradigm shift. India is slowly putting in place the logistical framework necessary to support its dream of becoming an export-led economy. Continued and deepened, these reforms could bridge the gap between India's expansive trade aspirations and the harsh realities of trading on the international stage, thus making India not just a significant exporter but a truly competitive one. These are the author's personal views. The author is a research associate, NCAER, New Delhi.
New Indian Express
29-05-2025
- Business
- New Indian Express
Union Cabinet approves Badvel-Nellore Corridor in Andhra Pradesh
VIJAYAWADA: The meeting of Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the construction of a 4-lane Badvel-Nellore Corridor with a length of 108.134 km at a cost of Rs 3,653.10 crore on National Highway 67 under the Design-Build-Finance-Operate-Transfer (DBFOT) mode. The proposed Badvel-Nellore Corridor will provide connectivity to important nodes in the three Industrial Corridors of Andhra Pradesh, i.e., Kopparthy Node on the Visakhapatnam-Chennai Industrial Corridor (VCIC), Orvakal Node on Hyderabad-Bengaluru Industrial Corridor (HBIC), and Krishnapatnam Node on Chennai-Bengaluru Industrial Corridor (CBIC). This will have a positive impact on the Logistic Performance Index (LPI) of the country. Badvel-Nellore Corridor starts from Gopavaram village on the existing National Highway 67 in Kadapa district and terminates at the Krishnapatnam Port Junction on NH-16 (Chennai-Kolkata) in Nellore district, and will also provide strategic connectivity to Krishnapatnam Port, which has been identified as a priority node under Chennai-Bengaluru Industrial Corridor.
Hans India
29-05-2025
- Business
- Hans India
Union Cabinet okays Rs. 3,653 cr Badvel-Nellore highway project
Amaravati/New Delhi: In a significant push to infrastructure and logistics enhancement in Andhra Pradesh, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi approved the construction of a 4-lane highway corridor from Badvel to Nellore. The project will be implemented under the Design-Build-Finance-Operate-Transfer (DBFOT) model at an estimated capital cost of Rs 3,653.10 crore. The 108.134-km-long corridor will begin at Gopavaram village on the National Highway 67 (NH-67) in YSR Kadapa district and terminate at Guruvindapudi village nearKrishnapatnam Port Junction on NH-16 (part of the Chennai-Kolkata corridor) in SPSR Nellore district. This strategic route will provide improved access to Krishnapatnam Port and connect key nodes across three major industrial corridors in the state. Theseinclude: • Kopparthy Node on Visakhapatnam–Chennai Industrial Corridor (VCIC) • Orvakal Node on the Hyderabad–Bengaluru Industrial Corridor (HBIC) • Krishnapatnam Node on the Chennai–Bengaluru Industrial Corridor (CBIC) According to the Centre, the new corridor will reduce the travel distance between Badvel and Krishnapatnam Port by nearly 34 km - from 142 km to 108.13 km- cutting travel time by an estimated one hour. This reduction will significantly lower fuel consumption and vehicle operating costs, contributing to both economic efficiency and environmental sustainability through a decreased carbon footprint. The project is also expected to generate substantial employment during its development. Estimates suggest the creation of approximately 20 lakh man-days of direct employment and 23 lakh man-days of indirect employment. Additionally, the improved infrastructure is anticipated to catalyze economic activity and job opportunities in the surrounding areas. Officials say the enhanced road infrastructure will contribute positively to India's Logistics Performance Index (LPI), further strengthening supply chain connectivity and boosting industrial growth in the region.
News18
28-05-2025
- Business
- News18
Government Approves Construction Of 108 Km Badvel-Nellore Highway In Andhra Pradesj
Agency: ANI Last Updated: This project will reduce travel distance to Krishanpatnam port by 33.9 km from 142 km to 108.13 km as compared to the existing Badvel-Nellore road The Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi, on Wednesday approved the construction of 108.134 km long, 4-Lane Badvel-Nellore Corridor. The cost of this project will come around Rs 3653.10 crore. This project will make easy accessibility to important nodes in the three Industrial Corridors of Andhra Pradesh, i.e., Kopparthy Node on the Vishakhapatnam-Chennai Industrial Corridor (VCIC), Orvakal Node on Hyderabad-Bengaluru Industrial Corridor (HBIC) and Krishnapatnam Node on Chennai-Bengaluru Industrial Corridor (CBIC). Along with this, this is likely to have a positive impact on the Logistic Performance Index (LPI) of the country. "Badvel Nellore Corridor starts from Gopavaram Village on the existing National Highway NH-67 in the YSR Kadapa District and terminates at the Krishnapatnam Port Junction on NH-16 (Chennai-Kolkata) in SPSR Nellore District of Andhra Pradesh and will also provide strategic connectivity to the Krishnapatnam Port which has been identified as a priority node under Chennai-Bengaluru Industrial Corridor (CBIC)," Cabinet Committee said in a release. This project will reduce travel distance to Krishanpatnam port by 33.9 km from 142 km to 108.13 km as compared to the existing Badvel-Nellore road and will reduce time by one hour. Additionally, this project will generate about 20 lakh man-days of direct employment and 23 lakh man-days of indirect employment. This railway project aims improve travel convenience, reduce logistic cost, decrease oil imports and contribute to lower CO2 emissions, supporting sustainable and efficient rail operations.," and "these improvements are expected to optimize supply chains, thereby facilitating accelerated economic growth. First Published: May 28, 2025, 22:41 IST
