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REGIONAL SEMINAR ON DEVELOPMENT OF EFFICIENT AND EFFECTIVE

LOGISTICS SYSTEMS 7- 8 May 2013, Hangzhou, China

Mohammad ShoaibDirector (Road Transport)

Ministry of CommunicationsGovernment of Pakistan

CHINA

MANGOLIA

INDIA

PAKISTAN

IRANAFGHANISTAN

OMANYEMEN

SAUDIA ARABIA

TAJIKISTAN

KAZAKHSTAN

TURKMENISTANIRAQ

TURKEY

UAE NEPALBHUTAN

BANGLADESH

MYANMAR

BANG`KOK

THAILAND VIETNAMCAMBODIA

LAOS

KOREA

JAPAN

KYRGYZSTAN

UZBEKISTANSYRIA

AZERBAIJAN

CASPION SEA

ARAL SEAARMENIA

GEORGIA

SRILANKA

MALASIA

SINGAPOR

TAIWAN

To Europe

PAKISTAN’s GEO-STRATEGIC LOCATION

PAKISTANPAKISTAN§ Area = 796,096 Sq- km

§ Population = 180 million

§ Road Density = 0.32 Km/sq-km

§ Currency = Pak Rupee

§ Roads have dominant share in both transport of passengers (94%) and

the Goods (97%) followed by rail.

§ Total Number of Vehicles are more than 9 .7 million

§ 56% are two Wheelers and 44% four Wheelers (including Cars)

§ Annual Cumulative Growth rate over 2000-12 is 9.3%

§ Karachi, the largest city has two ports- Karchi port and port Qasim

with road and rail linking to upcountry North

§ Third port i.e. Gawadar port near Iranian Border operationalized to

further facilitate and enhance movement of transit-traffic.

§ The country offers the most attractive transit route to the land locked

Central Asian countries.

PAKISTANPAKISTAN

Pakistan’s Trade & Transport Sector Vision

• Improve competitiveness of Pakistani trade internationally– Enhance Pakistan’s share of world trade (currently only 0.2%)– Increase Pakistan’s exports from US$ 20 billion to between US$ 250

– 300 billion by 2030

• Establish an efficient logistics chain and well integrated transport system that will– facilitate the development of a competitive economy– Reduce transport costs and– enhance affordability– Ensure safety in mobility– Improve regional connectivity (links with China, Afghanistan /

CARs, Iran etc.)– sustain high growth– smooth interface between the public and private sectors,

National Trade Corridor Improvement Program (NTCIP)

In addition, Pakistan’s “National Trade Corridor Improvement Program (NTCIP)” carries a reform agenda to revamp the prime areas of transport, trade policy, trade facilitation and energy.

NTC development adopts aHolistic and Integrated Approach to:

Reduce the cost of doing business by improving

trade logistics to international standards

Indus

Jhel

um

Che

nab

Ravi

Sutlej

DISPUTEDTERRITORY

Karimabad

Chilas

Sazin

Mansehra

N-15

S-1

Malakand

Chitral

Torkham

PESHAWAR

RawalpindiISLAMABAD

N-5Kharian

LAHORE

Okara

Bahawalpur

Rahimyar Khan

N-5

Mastung

Kalat

Surab

Taftan

Nok KundiDalbandin

Nushki

QUETTA

Chaman

N-40

N-2

5

Dadhar

DeraMuradJamali

Shikarpur

N-6

5

Jacobabad

Sukkur

N-50

KuchlakQilaSaifullah

Zhob

DI Khan

N-70Loralai DG Khan

Muzaffargarh

SkarduDambu

Naran

Dadu

Larkana

N-5

5

Rajanpur

N-5

5N

-55

Moro

Ghotki

Ubauro

Mianchannu

Mughal Kot

Retra

Parachinar

KhushalGarh

N-80MurreeKohalaN-75

MM--22

MM--11

MM--33

Pindi Bhattian

Faisalabad

Khairpur

Sahiwal

Gujranwala

MM--44

MM--88 Kararo

C H I N A

C H I N AI

R A

NI

R A

N

S-2

Besima

Nag

Punjgur

Kohat

N-85

N-30

S-3

EE--33

Wazirabad

Khanewal

EE--55

Chakothi

Kalam

Besham

N-9

5

N-90

Gujrat

Jhelum

Taunsa

Karakoram Pass 5575m

Abbotabad

Hasanabdal

Sust

GILGIT

N-35

NATIONAL HIGHWAYS & MOTORWAYS

Lodhran

Ratodero

Muzaffarabad

Jalkhad

Leh

Karak

Jalalabad

EE--55

B A

L

U C

H

I S

T A

N

G I L G I T

P U

N

J

A BF

A

T

A

Khu

ber Pak

htun

khw

a

K A S H M I R

Khuzdar

Wad

Sibi

Naushero Firoz

Chakdara

Dir

Drosh

Saidu

Multan

K2 8611m

Khunjrab PassKhunjrab Pass

N-4

5

Sambarial

Kotri KabirRanipur

MM--88

MM--88

N-25

N-25

EE--66

Indus

Kabul J A M U &

Super Highway

Liari

Bela

Uthal

Ormara

N-10

N-5

Kotri

Thatta

N-5MM--99

ARABIAN SEA

EE--77Hoshab

Gabd

Pleri

S I N D

Turbat

Hyderabad

Hala

KARACHI

PasniGwadarJiwani

Awaran

Duregi

Kakkar

• Total roads = 260,000 Km

• NHA network = 12,131 Km (4 %)

• Carries 80% of commercial traffic

• N-5 carries 65% of this load

Province Km %age

Punjab 2731 22.51

Sindh 2204 18.17

Khyber Pakhtunkhwa

1878 15.48

Balochistan 4565 37.63

Gilgit-Baltistan 0658 5.42

AJK 0095 0.78

Total 12131 100.00

Gharo

Keti BandarN-110

N-120Mirpurkhas

Umarkot

Khokhropar

Lakhi

Indus

N-105

Naudero

RAIL

ROAD RAIL

97%94%

2%0%5% 8%

0102030405060708090

100

%

Fre

ight

Tra

ffic

Passenger

Tra

ffic

ROAD AIR

National Highways Motorways

Planned

CROSS BORDER ROAD TRAFFIC

• Almost 95% of trade is sea-borne and volume of cross-border road traffic is very low at present.

• Only Torkham (Border with Afghanistan) has higher level of traffic with almost 400 vehicles a day and 700,000 tons of goods per year. This constitutes almost 70% and 50% of the total cross-border traffic of vehicles and goods tonnage respectively.

• International transit traffic is expected to increase manifold in the near future under bilateral and multi-lateral transport Agreements

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4

ASIAN HIGHWAY ROUTES IN PAKISTAN

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There is growing recognition within the Government of Pakistan (GOP) that the country’s ability to realize its economic potential is closely linked to the efficiency of its transport system. Accordingly, the Government has initiated a number of actions to address the key constraints faced by the sector. These include:

• A new integrated National Transport Policy.• Increase of infrastructure investments, including in transport, •Roads are increasingly being viewed as a ‘service’ and a ‘business’ and National Highway Authority (NHA) has set up a dedicated road fund account through which significant fund allocation is being made for network conservation.• A National Highway Safety Ordinance has been enacted to provide the legal basis for establishing the Highway and Motorway Police (NH&MP) Force under the federal Ministry of Communications. This measure expands the role of the very successful Motorway Police to the National Highway System, in a phased manner.

Key Government Initiatives

Key Government Initiatives

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§The qualifications and level of professional competence of Freight Forwarders are being raised through trainings to meet the challenges posed by the requirements of modern supply chain as per FIATA international standard to freight forwarders under the banner of PIFFA.

§To reduce transaction cost and expedite clearance of goods in ports, Pakistan Customs is implementing a single fully computerized Customs clearance system at all Customs Stations in Pakistan.

§Web based One Custom (WeBOC) has already been introduced at Karachi Airport and Port Qasim including QICT.

§We are working on arranging harmonized formats for producing electronic version of all important international trade documents to facilitate electronic transactions. Once this is achieved the Customs clearance time and transaction costs should get considerably reduced to facilitate the trade.

NATIONAL TRANSPORT POLICYNATIONAL TRANSPORT POLICYThe broad objectives are to:

Provide safe, reliable, effective, efficient, affordable, accessible, sustainable and fully integrated transport system that will best meet the needs of freight & passenger access and mobility requirements and will be aimed at improving levels of service and cost effectiveness in a fashion that supports governments goal of increasing public welfare through economic growth, and social improvement, poverty reduction and infrastructure and development while being environmentally and economically sustainable and energy efficient.

GOALS OF TRANSPORT POLICYGOALS OF TRANSPORT POLICY§ To support the goals of reconstruction, modernization and

development program and beyond for meeting basic needs, growing the economy, improving efficiencies, developing human resources, and facilitation of decision making.

§ To enable customers requiring transport for people or goods to access the transport system in ways that best satisfy their chosen criteria and meets their needs.

§ To improve our competitiveness and that of transport infrastructure and operations through greater effectiveness and efficiency, and to better meet the needs of different customer groups, both locally and globally.

§ To invest in infrastructure and transport systems in cost effective ways that satisfy social, economic or strategic investment criteria and satisfy the Government’s broad development objectives.

§ To achieve the above objectives in a manner that is economical, environmentally sustainable, energy efficient and minimizes negative externalities i.e. side effects.

SECTORS UNDER NTPSECTORS UNDER NTPThis National Policy covers an overview of vision, mission and strategic objectives of following eleven areas:

1. Road Infrastructure

2. Road Services

3. Railway Sector

4. Ports and Shipping Sector

5. Airport and Civil Aviation Sector

6. Pipeline Transportation

7. Water Transport on Rivers and Canals

8. Transport Logistics and Custom

9. Urban Transport

10. Inter Modal Transfer

11. Legal

Transport Logistics and Custom§ Facilitate and enhance the expansion of international trade and

tourism in general, and exports in particular.

§ Ensure that economic decisions are, as far as is possible, left to market forces, subject to general competitive principles applicable to all industries, with a view to maximizing consumer choice, need satisfaction and job creation.

§ Promote the development of an efficient and productive our transport industry capable of competing in international markets.

§ Standards of supply chain efficiency shall be set as objectives for the logistics industry based on a reliable performance-monitoring system.

§ Government shall facilitate development of logistics centers through public-private partnerships. The freight-forwarding industry shall operate under Government approved regulations and otherwise be self regulated.

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§ An automated commercial community single-window (one-stop) system shall be developed through a public-private partnership.

§ Legislation shall be introduced that permits a bill of lading facilitating door-to-door (D-to-D) or terminal-to-terminal (T-to-T) shipments under a single document. Freight transport insurance and financial regulations and practices related to freight-forwarding shall facilitate D-to-D/T-to-T operations.

§ Implementation of the Transports Internationaux Routiers (TIR) Concention & other international Customs Conventions shall be completed after a full assessment of implications for Pakistan.

§ Efforts shall be made to implement the Transit Transport Agreements

§ Monitoring of performance: Government will develop and specify key performance indicators with respect to its strategic objectives. The indicators will facilitate monitoring of the progress of various authorities in implementing the mission to ensuring compliance with legislation and promoting sustainability and competitiveness.

Problems In Logistics Sector

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A Logistics Cost Study carried out highlighted the following problems stated by European importers in the Pakistan context:

§Agreed delivery times are very often exceeded§Total lead time is rather long§Emergency replenishment orders are very difficult to get through§Full quality compliance percentage is low§No up-to-date communication vehicle§Ex-factory charges are often fluctuating§Damage and pilferage happens frequently§Image problem of freight forwarders§House Bill of Lading has created problems

NATIONAL TRADE FACILITATION STRATEGY

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With the developments in WTO and globalization of trade, trade facilitation has become an important tool for improving the competitive edge of a country in the international market place. Completion of all transaction requirements for the international supply chain to achieve just-in-time delivery within the shortest possible lead time and at the least cost of doing business requires adoption of trade facilitation measures with cooperation and coordination of all the concerned parties, and appropriate measures have to be adopted to remain in the competitive international market.

After taking into consideration the international developments and the situation in Pakistan, National Trade facilitation Strategy has been evolved. The measures that need to be adopted have been identified. An Action Plan indicating the targets for executing various strategy objectives has been set-forth.

Transport Legislation

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To modernize legislation of Pakistan relating to carriage of goods, the following Bills have been introduced , and are at present at different stages of its deliberation:

§Carriage by Air Bill, 2011

§Carriage of Goods by Road Bill, 2012

§Carriage of Goods by Sea Bill, 2012

§Sea Carriage Shipping Documents Bill, 2012

§Marine Insurance Bill, 2012

Draft Logistics Service Providers Regulatory Authority Bill 2013

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§In order to resolve the issues between the exporters and importers and logistics services providers like shipping agents, freight forwarders and container terminal operators regarding the shipping charges levied by logistics service providers, a draft Logistics Service Providers Regulatory Authority Bill 2013 has been prepared in consultation with all the stakeholders.

§The key objectives of this authority are:

§ to promote a modern system of logistics services in Pakistan.§ to coordinate with all government systems for efficient functioning of

logistic services§ to prepare model standard trading conditions for logistic services

providers§ to prescribe, regulate or implement measures and standards for

licensing or any matter related to logistics services

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THANK YOU

BILATERAL/MULTILATERAL TRANSPORT AGREEMENTS

Pakistan has signed following Bilateral / Multilateral TransportAgreements with different countries in the region:

§ Quadrilateral Agreement on Traffic in Transit among Pakistan,

Kyrgyzstan, Kazakhstan and China (In Operation since May

2004)

§ Bilateral Agreement between Pakistan and China on

International Road Transport (In Operation since April 2005)

§ Bilateral Agreement between Pakistan and Uzbekistan on

Cooperation in the field of Road Transport (To be

operationalized in near future)

§ ECO’s Transit Transport Framework Agreement (TTFA)

Between

Azerbaijan,Afghanistan,Pakistan,Turkmenistan,Tajikistan,

Kyrgyzstan, Kazakhstan, Uzbekistan, Iran & Turkey (To be Contd..

BILATERAL/MULTILATERAL TRANSPORT AGREEMENTS

§ Bilateral Agreement on Road Transportation between Pakistan

and Iran (In Operation since 1992)

§ Bilateral Agreement between Pakistan and Turkey on Road

Transportation (To be operationalized in near future)

§ Agreement on Pak-India Bus Services (In Operation)

§ Lahore – New Delhi (3 times a week from each side)

§ Lahore – Amritsar (2 times a week from each side)

§ Nankana Sahib – Lahore – Amritsar (2 times a week

from each side)

§ Agreement on the commencement of Bus Services between

Pakistan and Afghanistan

§ Peshawar – Jalalabad (In Operation since May 2006)

§ Quetta – Qandhar (Yet to be operationalized due to

security concerns) Contd..

BILATERAL/MULTILATERAL TRANSPORT AGREEMENTS

§ Proposed Agreement between the Government of Islamic Republic of Pakistan and the Republic of Turkmenistan on transit traffic (Proposed by Pakistan - under Negotiation)

§ Proposed Trilateral Agreement between the Governments of Pakistan, Afghanistan and Tajikistan on Transit Trade (Proposed by Pakistan - under Negotiation)

§ Proposal for Pakistan’s joining to CAREC Cross-border Transport Agreement (CBTA)