Trade logistics in today’s globalized world, plays a significant role in the value and volume of global trade and a chief barrier to trade is poor quality logistics. Through reducing the cost involved in transporting goods high quality logistics services enhance the competitiveness of a country’s exports. Researchers revealed that across the board, determinants of trade logistics, like customs procedures, tracking and tracing services, overall infrastructure and logistics competence impact trade comparatively greater than less policy-dependent trade determinants like transport and distance. Various studies also confirmed that logistics is the main component of today’s business operations and believe most critical factors and in success of business, perform a vital role. No doubt, logistics is movement of good from point of origin to point of consumption. To save cost and get additional efficient consequence from specialized service providers, mostly firms rely on third party logistics. The Experts revealed that the growth in trade and logistics are directly proportional to each other. The trade could be highly enhanced through investments in logistic services and infrastructure. Moreover, the logistics Industry also in Pakistan’s economy, plays a significant role– yet, it is plagued through incompetence in terms of lacking a basic infrastructure; cost & period effectiveness with respect of the supply of goods within and outside the country and thus could perhaps be termed as a child of sorrow. Unfortunately in many aspects Pakistan’s logistics system lacks expertise. For instance, Pakistan is one of the best producers of agricultural commodities such as rice, cotton, wheat, sugar, many vegetables and fruits and has sufficient resources to transform the raw materials to finished product; the only need is to bring about synergy among the trade and logistics for which a platform is required in the shape of a separate ministry to address all the challenges. The Country looses, according to figures issues by the Punjab Board of Investment and Trade, an estimated 40 percent of its production of vegetables, fruits and dairy items because of the lack of a sufficient cold supply chain. Pakistan gets, on average, only 41 percent of the global price on its food exports owing to weak cold chains in the country. Furthermore statistics showed that on the aggregated Logistic Performance Index (LPI) Pakistan is ranked at 95 among 167 countries, trailing behind a number of Asian countries because of lack of investing on infrastructure projects counting highways and airports. In the list, India is at 35th position while Sri Lanka stands at 92nd place. According to a report published through the State Bank of Pakistan (SBP), regional countries counting Thailand, Indonesia, Malaysia, Vietnam and Philippines are far ahead of Pakistan,. Statistics also showed that Pakistan faces unluckily huge trade deficit, which had peaked at $37.6 billion in FY2018, declined $5.8 billion to $31.8 billion in FY2019. The trade deficit more declined in the first half of FY20. The period between July and December 2019 the experts recorded, saw a trade deficit of $11.7 billion, down almost 30.3 percent from $16.8 billion in the corresponding period of last year. The reduction in the trade deficit was mainly driven through the decline in imports. Imports were registered at $60.8 billion in FY2018, which declined to $54.8 billion in FY2019. They decreased more by 17 percent in the first 6-month of FY20 over the corresponding period of previous year. Total exports in FY2019, at $23 billion, were slightly below total exports in FY2018, at $23.2 billion. However, the exports have grown so far in FY20 as shipments in the first 6-month increased to $11.5 billion from the $11.2 billion registered during FY2019. In percentage terms, the growth was 3.15 percent. The present government’s emphasis on public private partnership program includes transport and logistics as one of the main sections to be worked on as investment in this area will surely improve trade. On priority basis the Government of Pakistan must take this forward and involve private sector extensively in the project as this is need of the hour. It is also said that the recent emphasis of the government on trade not aid is probable to open markets for Pakistani products to global markets. It is hoped that this implies an enormous opportunity as winning trade has to be backed up through strong logistics and urge public and private sectors to look into improving logistics competency to another level. Trade related agreements with dissimilar countries the government of Pakistan has been trying to sign which is predicted to open various doors not only to facilitate trade among them but the development of infrastructure with special emphasis on intra regional connectivity by the construction of road, rail and air networks. The Government of Pakistan’s strategy of enhancing bilateral trade with neighboring countries the experts recorded, would be a great opportunity that would not only decline the trade logistics cost but also decline the risk element involved in the transport of perishable cargo because of shorter transit.
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CPEC
Recently In transport and storage, unveiled China’s One Belt One Road (OBOR) plan aims to construct a global logistics network, and expand the warehousing and distribution network between main regions of Pakistan. Storage bases will be constructed first in Islamabad and Gwadar in the first phase, then Karachi, Lahore and another in Gwadar in the second phase, and between 2026 to 2030 Karachi, Lahore and Peshawar would each see another storage base. The OBOR plan outlines an engagement that runs from one end of the supply chain all the way to the other for agriculture. Logistics companies it is also said would operate a large storage and transportation system for agrarian produce. With a number of projects on-going and pending, heavy vehicles requirement is crucial. To meet these requirements, companies such as NLC prefer to utilize imported trucks because of their high quality. At least 100,000 more trucks will be required to transport construction materials, movement of export-import trade and increased volume of goods.
Conclusion
No doubt, fast progress of the country and well being of the people is connected with strong and proper logistics management system. The road infrastructure as well as ports are should be built with immediate effect in order to boost the trade of Pakistan.