Karachi: In a bid to address the critical challenges facing Pakistan's export sector, Mian Zahid Hussain, a prominent business leader and former provincial minister, has pinpointed the nation's logistics domain as a significant structural impediment that demands urgent reform. He emphasized the need for the establishment of a National Logistics Authority and a strategic pivot towards rail freight to enhance Pakistan's export competitiveness.
Hussain highlighted that the inefficiencies in the logistics sector act like an export tax, restricting growth and jeopardizing the country's position in global supply chains. With this sector contributing 15.6% to the GDP, nearly twice the average in advanced economies, the high costs underscore systemic inefficiencies.
Pakistan's exclusion from the World Bank’s 2023 Logistics Performance Index, attributed to inadequate data and stakeholder engagement, further dampens investor confidence. Currently, 94% of cargo is transported by road, escalating expenses and leading to significant road wear. Additionally, ports like Karachi and Port Qasim are underutilized, functioning below 45% capacity, with container dwell times exceeding those of regional counterparts.
Hussain advocates for a National Logistics Authority to streamline oversight, enhance coordination, and transition more freight to rail, aiming to reduce road freight reliance from 94% to 50%. This shift would involve developing rail freight corridors and upgrading Pakistan Railways.
He also suggested recognizing trucking as a formal industry to improve financing and fleet modernization. Expanding warehousing and cold storage facilities near ports could mitigate post-harvest losses, which are currently between 30-40%. Further, incentivizing vessel handling at Gwadar Port is crucial to leveraging its strategic location and diversifying within the Belt and Road Initiative framework.
Through targeted investments and comprehensive reforms, Mian Zahid Hussain believes logistics costs can be significantly reduced, thereby enhancing the nation's export potential.