Latest news with #NationalLogisticsDay
Business Recorder
02-07-2025
- Business
- Business Recorder
National Logistic Day: Message from M. Jamil Ahmed Chairman PIFFA
TEXT: On this National Logistics Day, I extend my deepest appreciation to all the professionals and organizations that form the backbone of Pakistan's logistics and freight forwarding industry. From ports to warehouses, from roads to rail — it is through your tireless efforts that goods continue to move, economies continue to grow, and Pakistan stays connected to global trade routes. As Chairman of the Pakistan International Freight Forwarders Association (PIFFA), I am proud of the pivotal role our members play in streamlining trade operations, promoting compliance, and upholding international standards. The logistics sector is not just about transportation — it is about reliability, innovation, and resilience. We are, for this purpose also actively engaged with the Government of Pakistan to resolve critical issues related to freight forwarding licenses and legislative frameworks. Our aim is to reduce costs and simplify processes, making it easier for our members to conduct their businesses e iciently, transparently, and in compliance with tax regulations—both nationally and internationally. It is my unwavering mission to lead PIFFA and its training institute, towards continuous improvement, digital advancement, and stronger member support. With the grace of Allah (Insha'Allah), we will continue collaborating with all relevant authorities to create an enabling environment for our industry. Let us take this day to recognize our challenges, celebrate our achievements, and reaffirm our commitment to building a more efficient, secure, and future-ready logistics landscape for Pakistan. Copyright Business Recorder, 2025
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 Yet, despite its significance, Pakistan's road logistics sector is mired in inefficiency, underinvestment, and outdated governance frameworks.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
