According to a news report appearing on February 1, inefficiencies of the country's road freight industry have been costing roughly Rs 150 billion ($2.5 billion) annually to the national exchequer.
It has also pointed out in the report that the existing structure of the industry can neither integrate with international trucking nor support the country's projected economic growth while the trade would continue to rely on the status quo in the absence of alternative options. Needless to point out, the woes of the road freight or trucking industry, remaining neglected too long, have been hampering the desperate efforts to gain a competitive edge in the international market.
The only progress, in this regard, is the identification of the major areas of losses from inefficient road freight sector. These areas are extra fuel cost and subsidies on the use of diesel, flawed construction of highways and poor quality of service. Worse still, the industry is responding to its accumulated problems with over-supply of illegal and unregulated services. It is understandable then that operating in an 'illegal market' has kept the freight industry impervious to improvement and modernisation.
In so far as the government's initiative towards addressing the sector's overall predicament is concerned, it left a great deal to be desired until too late in the day. For it was in September last year that the National Highway Authority was reported to be planning to introduce a new truck- financing scheme with appropriate incentives to provide efficient transportation for the national trade.
As part of the revised truck specifications, it focused on deployment of two to three and multi-axle trailer combos, financing of which would help implement the proposed scheme to facilitate safe movement of goods, besides increasing the workable life of highways. Under the scheme, the government was to provide financial assistance with low mark-up from the Small and Medium Enterprise Development Authority, commercial banks and other financial institutions.
Moreover, the scheme sought to launch a modernised truck fleet under the National Trade Corridor, in order to minimise the traffic load on highways and motorways across the country, hoping that eventually it would also help reduce the overall cost to economy resulting from overloading, environmental externalities and fuel inefficiencies. Besides seeking further rationalisation of truck import tariffs to raise the share of tractors and trailers in the transport fleet, it also provided for encouragement of local manufacturing of vehicles of upgraded specifications.
It will be recalled that earlier, in November last year, the Engineering Development Board's national standards committee on trucking, which reviewed various models, found that European standards with modifications in the light of local conditions, would provide an opportunity for the domestic industry to play its role in the North-South corridor. On that occasion, EDB chairman Imtiaz Rastgar had highlighted the importance of standards in the trucking sector of Pakistan, urging the manufacturers to pay special attention to manufacturing of trailers in the country.
It will thus be noted that, notwithstanding, a belated focus on the need of catching up with the world trucking industry, the private sector has been encouraged to contribute to the effort. Reference, in this regard, may be made to the signing of an agreement in November last year, between Gulftainer Company Limited of Sharjah and Shaheen Group, Karachi, for establishment of a joint venture company focusing on inland logistics and transportation in Pakistan. That it has been inspired by the idea of revamping and enhancing inland transportation in Pakistan should augur well for the future.
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