- Govt must focus logistics as a cross-cutting policy concern
- Enhancing and improving the national transportation sector is essential
Interview with Syed Zulfiqar Ali Kazmi — a Supply Chain Professional
PAGE: Tell me something about yourself, please:
Syed Zulfiqar Ali Kazmi: I am a Supply Chain Professional with comprehensive and diversified experience in General Operations, Supply Chain and focus on Import Operations, Export Operations, 3PL & 4PL Management, Physical Distribution Network Planning & Management, Freight Management, Distribution Management, Fleet Management, Project Logistics, Courier Operations Management, Customer Services, Quality and Performance Audit Management, Training & Development, Procurement Management, Warehousing and Inventory Management, Transportation Management, Customs House brokerage, Contracts Management, Facility Security Management, SOX Compliance, TL-9000 Audits, Quality Audits, Transport and Travel Management, Trade Compliance and Reverse Logistics.
I did Masters in transport Management from the University of Karachi with First Class second position in Order of Merit and M.Phil. in Management Sciences from the Qurtuba University of Science and Information Technology.
Professional Qualification: CSCM-CLTD-P
Membership: General Secretary SCAP-Supply Chain Association of Pakistan
Fellow Member: Chartered Institute of Logistics & Transport UK-Pakistan Chapter
Member: Management Association of Pakistan
PAGE: What is your take on the logistics sector?
Syed Zulfiqar Ali Kazmi: Logistics sector is one of the most important factors in any economy’s growth and strength. Today it is believed that our logistic cost is around 13-14 percent of GDP, but the global standard is around 8-9 percent. If we look at the Logistics Performance Index of developed countries we clearly observe that they have higher and more competitive Logistics Performance Index.
The LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance. The LPI is based on two components (i) a worldwide survey of international logistics operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics “friendliness” of the countries with which they trade and (ii) the LPI is based on granular high-frequency information on maritime shipping and container tracking, postal and air freight activities
PAGE: Could you tell us about the issues of logistics and transportation in the corporate sector?
Syed Zulfiqar Ali Kazmi: After the Covid era, we see changes in the landscape of logistics and supply chain. We see emerging new challenges, Logistics and SC Fraternity examine things critically and start R&D for the solutions and optimizations of resources, costs and services. Some of the critical challenges we see in the logistics sector are:
- Increasing transportation costs.
- Inconsistencies in tracking.
- Limited visibility of shipments.
- Fragmented communication.
- Empty miles.
- Delivery delays.
- Extended Warehouse Management (EWM).
- Transportation Management (TM).
PAGE: Could you share your perspective on promoting the logistics and transportation sector in Pakistan?
Syed Zulfiqar Ali Kazmi: According to the Pakistan Bureau of Statistics, Pakistan’s logistics and transport sector contribute 22.3% of the service sector, while it takes part in 10% of the nation’s GDP. If we see the Vision 2025 of Pakistan, clearly states that enhancing and improving the national transportation sector is essential. We need to optimize the cost of logistics to be more competitive in the international market. Currently, roadways play a critical but the contribution of rail freight requires to be improved competitiveness. For the sustainable development of Pakistan, we need a robust and cost-effective transport and logistics sector. Export also depends on this very important sector. Though we are undergoing an economic slowdown but transport and logistics have shown positive trends. In 2018 the inland traffic by road and rail was estimated at 433 billion passenger kilometers (BP-Km) and 269 billion tonnes-km (BT-Km) respectively and it is likely to increase to 614 BP-Km and 381 BT-Km. The sector was providing jobs to 3 million people and the same is expected to rise more than ever. The sector is getting a 25-30% share of the annual public sector program (PSDP) but concerted efforts are required to promote public-private partnerships for leveraging higher investments from the private sector.
In 2015 World Bank reported that the logistics sector of Pakistan could capitalize on an untapped potential worth $30.77 billion. This value would be realized by developing integrated road/rail networks (including air, sea & dry ports) thereby, improving connectivity and interlinking the rural and urban markets viz-a-viz among regional trading partners. Roads carry approximately 93% of passengers and 94% of the freight traffic while Railways is only adding about 6% to freight traffic. This heavy burden on the road has resulted in traffic congestion, pollution and fair, wear & tear of roads. Road traffic costs too much due to imported fuel. Almost 35% of the fuel is consumed by the transport sector.
Pakistan Railways is perpetually running at a loss due to low freight traffic and subsidized passenger traffic. According to the World Bank one freight train is equivalent to 100 trucks.
As logistics is price sensitive sector so private and public investment must be brought in for rail development. Through the rail system, almost a ton of goods can be transported over a distance of 250 miles in a gallon of fuel as compared to 90 miles by road.
Internationally 50% of cargo is carried/traded through rail development. In Pakistan, rail share is just 5% due to a lack of quality containers & non-container freight trains. Pakistan Railways has launched the very first freight train with 75 containers on the Karachi to Lahore route through a private-public partnership. There is a plan to bring improvement in the existing rail system and setting up new railway tracks. Moreover, cold storage containers are very much required to reduce/minimize the wastage of farm produce & other perishables items that Pakistan is currently unable to produce. This substandard quality fleet of trucks and the absence of a comprehensive regulatory system not only decreased our exports but has resulted in a poor ranking of our LPI.
Since our trucks do not comply with international standards so local logistics companies automatically disqualify them from the regional road freight trade. TCS and NLC Have a TIR but they don’t have regular volumes and secondly, unfriendly policies won’t encourage the private sector to Invest in the logistics sector as ROI on the Investment is not consistent and secure.
Pakistan’s sustained economic recovery and growth hinges on a robust, integrated, efficient and competitive logistics sector so, government should focus on logistics as a cross-cutting policy concern, crossing the administrative boundaries of transportation, commerce, infrastructure, industry, finance and the environment. The creation of a Ministry of Transport is an important first step in this as it will help to gradually bring the undocumented part of the sector into the formal economy by offering incentives such as affordable financing options to upgrade fleets, build warehouses and train resources and if the government succeeds in documenting the grey economy, then it will definitely provide an immediate boost to industry profitability and tax revenues for the government.
Furthermore, the process of implementing the long overdue National Transport Policy, which focuses on streamlining and modernizing each sub-sector of logistics enables Pakistan to reap the benefits of CPEC (China-Pakistan Economic Corridor) as well as increased volumes of regional trade with Central Asian countries.
PAGE: How important is transportation/logistics for the prosperity of an organization?
Syed Zulfiqar Ali Kazmi: It’s essential for any business to be able to procure materials, take them to a production location, and distribute their final goods. Transportation connects companies to suppliers and customers, creating an important framework that allows supply to meet personal and professional demands. It is an important activity that provides a supportive framework for the demand for goods and services while ensuring that customers can access what they need as soon as they need it. Lack of proper transport management has the adverse effect of making it difficult for businesses to serve their customers efficiently.
Factors such as mishandling products while in transit, wrong shipping locations, and late deliveries can lead to unhappy customers who express their dissatisfaction by no longer making purchases from the company. Alternatively, when a company has an efficient transport system, it enables smooth trading processes and establishes economies. Whether you need to move products locally or internationally, you need reliable transport solutions that are capable of making sure that everything arrives at its destination on time and in optimal condition.
The business world is highly competitive and this makes it necessary to keep customers satisfied by maintaining a competitive edge. An effective transport system plays a valuable role in sustaining services on a long-term basis and keeping the company afloat. Advancements in different types of businesses have fueled the development of distribution, transport, and marketing. Surviving in the market requires transport as it is a major contributor to success. This is attributed to its influence on business connections and customer satisfaction.
Transport is necessary for every stage of the production process, from designing concepts and manufacturing to delivery and consumption. Maximizing the prospects of business functions can only be achieved if each procedure and transaction is properly coordinated. Transport is the foundation of any society. Economies thrive on having the right infrastructure that consists of features such as proper road links and modern airports.
Many industries require transport to improve their businesses. Workers depend on transport to fulfill their obligations. Good transportation promotes business ventures by enabling the workforce to move around safely and quickly. Each day and at every moment, the importance of transportation is apparent. The whole political, social, and economic well-being of a nation relies on a well-organized transport system. Various forms of movement are available, including trams, buses, bikes, trains, trucks, cars, planes and more. Each mode of transportation has its level of value in different parts of the world which makes it more crucial to one demographic than another.