Despite having a huge idle capacity at ports Pakistan will still find it difficult to attract transshipment trade without removing bottlenecks and adopting a market-oriented approach and strategy. This would be an uphill task for the government particularly when all the players and stakeholders in maritime affairs are presently operating in pockets with no coordination.
The government has been striving to bring all the stakeholders on board and also held many consultative meetings in order to evolve a comprehensive maritime strategy for attracting transshipment trade but as yet no results and none that can be seen in foreseeable future. This a complex issue and not easy to resolve because a number of regulators and stakeholders involved in this trade are not working in tandem.
However, the Ministry of Maritime Affairs (MoMA) has recently taken up the initiative to sort out the issues as the government of Uzbekistan for over a year had been showing keen interest in using Pakistani ports for transshipment of goods. Uzbekistan and other landlocked Central Asian Republics (CARs) are at present using Russian ports for their external trade (imports/exports).
According to maritime affairs experts Uzbekistan is double landlocked country and if Pakistan manages to capture transshipment trade of Uzbekistan it will help open up gateway for other CARs as well.
Uzbekistan is rich in gas and oil resources, gypsum and is also a grain basket of the region with a total external trade volume of up to $100 billion. However, recent visits of dignitaries from Uzbekistan indicated that around $50 billion transshipment trade would make its way from Pakistani ports once an arrangement was reached.
Due to our narrow economic base largely dependent on agriculture and some industrial goods exports of medium range (mostly textiles), Pakistan is faced with acute budget and trade deficits for the last many decades. It is high time that the country in order to become economically strong and independent diversifies its economic activities to narrow down the chronic twin deficits adversely affecting the country’s economic growth.
In order to capture this opportunity not only ports have to become efficient to ensure minimum turn-around period for ships calling at country’s ports but other stakeholders will also have to equally put in their share to ensure that shipping lines which are normally reluctant to call on such ports where their economies of scale are disturbed and often result in higher operational costs will never be attracted.
Therefore, it is high time that terminal operators, stevedores, clearing and forwarding agents, trucking and logistics, State Bank of Pakistan and customs should rise to the occasion and adopt market base strategy by removing all sorts of bureaucratic hurdles and impediments that normally slow down cargo movement from port areas resulting in congestion due to shortage of space.
Pakistani ports are operating under capacity. There would be hardly any problem if the country gets transshipment cargo and earns foreign exchange. According to Karachi Port Trust (KPT), its annual cargo handling capacity is around 125 million tonnes but uses only 45 million tonnes. Similarly, Port Qasim has a total cargo capacity of 81 million tonnes and uses round 50 percent of that. The Gwadar port also has huge idle capacity that could be used for transshipment cargo. Hence the need for looking into the possibility of adopting the Convention on International Transport of Goods under the cover of TIR Carnets (TIR Convention) for streamlining the handling of transshipment cargo.
Copyright Business Recorder, 2021
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