The installation of tracking device on vehicles/trailers of bonded carriers, which has been made mandatory by the Federal Board of Revenue, is a multi-purpose initiative meant essentially to avert the incidence of "missing containers" or the offloading of cargo during trans-shipment in order to avoid paying customs duty.
A Recorder Report says that the system, initiated on an experimental basis, will be strictly monitored by customs staff on 24-hour basis. Under the new system, the FBR has made it mandatory for all bonded carriers to use only such vehicle/trailer units for trans-shipment, which have a permanently installed/fixed tracking device of a reputable company.
Secondly, the customs staff will verify the satisfactory working of the tracking system and the identity of the vehicle used by the bonded carrier for trans-shipment of consignments, as well as the road-worthiness of the vehicle/trailer and the registration number and other particulars of the vehicle.
Thirdly, it has been made mandatory for the permanently installed/fixed tracking device to be able to show the location of a particular vehicle or trailer at any given time and its route and stoppages en route, as and when required by the customs monitoring authorities.
The new system has been introduced to improve trans-shipment of the import/export cargoes. The FBR has already issued an SRO, 286(1) 2007, under which bonded carriers without tracking device attached to their vehicles are not allowed to take cargo from ports from July 1, 2007, including Karachi Port and Port Qasim. However, Pakistan Railways and National Logistic Cell have been exempted from this condition.
Under the new guidelines, the bonded carrier licence will be issued by Collectors Customs Appraisement, Karachi, for one year on the recommendation of a team of collectors comprising Collectors Customs Appraisement, Preventive and Port Qasim after completion of formalities under the Customs Rules 2001.
However, the licence will be liable to be revoked at any time by the licensing authority. Further, the bonded carrier will have to deposit a bank guarantee of Rs 5 million with the concerned collector of customs, while registering vehicles for trans-shipment of cargo to upcountry dry ports.
It should be mentioned here that major challenges in Pakistan today are related to domestic transport, and the development and implementation of contemporary logistics. The key parameters in contemporary logistics - low lead time, frequent and smaller deliveries, reliability in delivery and quality - need to be introduced and pursued by Pakistani companies.
The total quality and supply chain has to be bound together to avoid shortcomings at the one end translating into lack of competitiveness at the client's end.
According to available data, over 4,000 vehicles and trailers are currently operating across the country, handling import/export cargoes, with their share in the local cargo transportation standing at around 70 percent. This is reflective of the pivotal place they occupy in the trans-shipment sector.
However, as a majority of the bonded carriers do not have the tracking system installed on their vehicles, implementation of the mandatory requirement immediately may create a major crisis in trans-shipment sector. There is thus a need to allow a grace period for this purpose.
The bonded carriers have argued that the installation of a tracking device requires very high investment, as the device is priced at around Rs 40,000 to Rs 50,000, while the monthly or yearly charges will be an additional burden on them.
However, the objection does not seem to carry much weight, given their colossal annual turnover and profit. The government's decision on tracking device is clearly a step in the right direction, as there have been reports of serious malpractices in trans-shipment sector. Not only will it help combat pilferage and theft en route, it will also help prevent customs duty evasion.
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