Trade & International Transport of Pakistan

by

Babar Badat

at

ECO’s TIR workshops in Pakistan, August 2014

I have been requested to speak on the above, rather broad, subject by my colleagues organizing

this workshop however, I have spoken at length on this at various occasions so today I will

narrow it down to our cross border regional position viz a viz the TIR Convention.

Pakistan, Afghanistan, Western China and Central Asia have a combined population of around

250 million people and this whole region is still not connected by proper transport services.

Pakistan has a geographical advantage in the region, its Ports can provide the closest access to

the logistics requirements of these 250 million people, Karachi’s gateway potential can be

optimized by creating a vertical connect between Karachi’s wharfs and the markets of Western

China.

Two prerequisites for regional connectivity:

a) TIR Convention.

The Government should persue the finalizing of the necessary International conventions as well

as the regional bilateral and mutilated agreements. It should urgently persue the ratification of

the “TIR Convention.”

b) Trucking modernization policy.

The Government should support the development of the countrys international Freight

Forwarding Industry. It should urgently persue the implementation of the “Trucking

modernization policy.”

Status :

The policy got Federal Cabinet approval in 2007 however it is yet to be implemented. The objective of this policy was to reform and promote an integrated, enduring and sustainable initiative towards “Modernization of the Trucking Sector in Pakistan” with a holistic approach. Instead of dealing with each subject separately the policy covers the entire expanse of the trucking industry, some of the cross sectional and cross cutting subjects relating directly or indirectly to the initiative were incorporated in the policy and were stated as:

- Industry status for the Trucking sector.- Encourage corporate structure in the industry.- Development financing for fleet formation.- Axel load management.- Drivers training & re-training / licensing & re-licensing.- Trans freight stations / modern cargo handling facilities.- Trailer manufacturing and registration.- National standards and specifications for trucks and trailers.- Motor vehicle examination (MVE).- Motor vehicle registration (MVR).

The Freight Forwarding sector was already declared as an industry by the Government in the year 2005, in order to encourage fleet formation by these Freight Forwarding & other Logistics companies the policy recommends that the Trucking Sector be declared as an “Industry”. Industry status will facilitate the Trucking Sector on account of:

i) Lending by commercial banks to corporate trucks / fleet operators, at competitive rates.ii) Extending the necessary tax incentives to the sector upon corporatizing itself.iii) Utilities would be available at industrial rates instead of commercial rates.iv) Help create regional assimilation.v) Attracting the much needed investment in the formal fleet operations.

The policy framework provides encouragement for fleet formation through financial and operational incentives to improve the scale of operations, equipment and ensure better returns to both the operators & consumers.

International conventions pending accession:

Land transport conventions:

Convention on Contract for the International Carriage of Goods by Road (CMR), 1956

Customs conventions:

Customs Convention on Containers, 1972 Customs Convention on the International Transportation of Goods under Cover of

TIR Carnets (TIR Convention), 1975 Customs Convention on Temporary Importation of Commercial Road Vehicles,

1956 International Convention on the Harmonization of Frontier Control of Goods,

1982

Transit trade agreements:

ECO Transit Transport Framework Agreement in force still needs to be implemented

Quadrilateral Agreement on Traffic in Transit among Pakistan, China, Kyrgyzstan and Kazakhstan, 1995 still need to be fully implemented

Bilateral Agreement between Pakistan and Uzbekistan in the Field of Road Transport, procedure yet to be finalized by Uzbekistan

Agreement on International motor Transportation between Pakistan and Kazakhstan, yet to be ratified by both countries

International Road Transport Agreement between Pakistan and Tajikistan, proposed by Pakistan, still awaited

International Road Transport Agreement between Pakistan and Turkmenistan, proposed by Pakistan, still awaited

CEREC Cross Border Transport Agreement needs to be finalized

EXTEMPORE:

Logistics assimilation at the regional level:

The national logistics industry should connect at the regional level with their counterparts. The Government should support the private sector in developing this initiative.

• ECO - The regions freight forwarding association set up a Federation

called ECOLPAF

• SAARC - SAARC freight forwarders forum is already in existence.

• CEREC - The member countries are now looking at the formation of a

regional logistics forum.

• A Integrated Transit Trade System should be developed to open & develop specific regional vents. Participation of the private sector logistics industry should also be encouraged.

EXTEMPORE:

Critical issue:

The most critical issue faced by the country’s logistics industry is that there was no focal point, institution, government department or Ministry dealing with logistics or transport issues, the industry is spread over “ 7 Federal Ministries” making it difficult to coordinate the activities for any cohesive & productive action. Today the countrys logistics canvas is spread over the following Ministries:

 

International Freight Forwarding services, Regional bilateral & multilateral agreements - Ministry of CommerceAnd convention including the TIR Convention

Shipping services, ports & terminals etc. - Ministry of Ports & Shipping

Air services, airports etc. - Ministry of Defence

Roads & highways - Ministry of Communication

Trucking sectoral development plan. - Ministry of Industries

Railways freight services - Ministry of Railways

Customs affairs, border crossings etc. - Ministry of Finance

 

EXTEMPORE:

Way forward

Ratification and Accession to international conventions including the TIR Convention.

Negotiation and implementation of transit and transport agreements.

Simplification and harmonization of trade procedures.

Efficient customs procedures for transit traffic.

Physical connectivity.

Modern transports and logistics services.

Interconnection of customs data exchange between Pakistan and the other regional countries.

Single point for all logistics & transport issues “Ministry of Logistics, Freight Transport & Ports.