- Pakistan’s logistics sector surges with SEZs, cold chain hubs, rail upgrades, and connectivity
Imagine transforming Pakistan’s rugged landscapes into a humming artery of global trade — where trains haul copper ore from Balochistan’s mines to bustling ports, and cold-chain hubs preserve fresh mangoes for Gulf supermarkets. That’s the promise of the China-Pakistan Economic Corridor (CPEC) Phase II, formally launched in 2025 with five new corridors emphasizing industrial growth, agriculture, and connectivity. As CPEC evolves from massive sovereign projects to nimble private ventures, savvy investors from the Gulf, China, and Asia stand to capture outsized returns. But where exactly? Think rail upgrades, port ecosystems, thriving Special Economic Zones (SEZs), and “mid-mile” logistics that bridge farms to global markets. With multilateral players like the Asian Development Bank (ADB) stepping in amid China’s financing pivot, the stage is set for blended deals that de-risk and deliver.
Why Infrastructure Now? Demand Is Surging
Pakistan’s logistics sector is at an inflection point. Two megatrends are fueling it:
- Regionalizing Supply Chains: As global trade fragments, intermediate goods are reshuffled across South Asia. Pakistan can snag a bigger slice if it delivers reliable transit — think temperature-controlled shipments with full traceability and ESG compliance. For Gulf investors, this means seamless links for everything from textiles to perishables destined for Dubai or Riyadh.
- Industrial Relocation and Resource Booms: CPEC Phase II’s SEZ push, plus mining surges like Reko Diq’s copper, demands heavy-haul solutions. A daily ore train could alone justify a rail line; a cluster of reefer exporters might spark a cold-chain revolution.
The gap? Connective infrastructure — rail sidings, terminals, smart warehouses, and data-driven orchestration. Latent demand exists; private capital can fill it faster than governments.
CPEC’s Next Chapter: From Megaprojects to Profitable Nodes
Phase I built energy and highways; Phase II, launched in 2025 with pacts on training, energy, ports, and agriculture, focuses on industrialization via SEZs. Success depends on operational glue: utilities, customs, and logistics, not just inaugurations.
SEZs in the Spotlight: Priorities include Rashakai (Khyber Pakhtunkhwa, with a new 29-km gas pipeline underway), Allama Iqbal/FIEDMC (Punjab), Dhabeji (Sindh), and Bostan (Balochistan). These aren’t mere land plays — they’re evolving into export hubs with rail spurs and reliable power.
Financing is diversifying. China’s pullback on big loans opened doors for multilaterals: ADB’s $2 billion commitment to ML-1’s Karachi-Rohri section signals bankability, drawing in PPPs and private terminals.
ML-1: The Rail Backbone for Bulk and Speed
Upgrading the 1,700+ km Karachi-Peshawar line promises 24-72 hour port-to-hinterland hauls, heavy loads for ores and grains, and competitive intermodal options over trucking. With ADB leading the first phase and China in a supporting role, investors can bet on adjacent assets like inland container depots (ICDs).
Private Plays:
- ICDs at Sukkur/Rohri, Multan, and Faisalabad — linked to Karachi and Port Qasim via block trains.
- Rail-served cold hubs for meat, dairy, and horticulture, complete with reefer plugs and labs.
- Wagon leasing fleets for containers and bulk.
- Fuel terminals backed by miner contracts.
Risks? Currency fluctuations and tariffs. Mitigate with availability payments or creditworthy partners like exporters.
Port Ecosystems: Karachi’s Cash Flow vs. Gwadar’s Upside
Karachi-Port Qasim handles most containers.
Opportunities: Deeper channels for bigger ships, automated yards, and off-dock parks with assembly services.
Gwadar? Infrastructure upgrades continue, with the Free Zone gaining traction and regular commercial traffic. The new international airport, operational since January 2025, adds air cargo potential for perishables — though utilization remains low due to connectivity gaps. Approach Gwadar portfolio-style: Balance it with Karachi assets for steady returns amid long-term growth.
Security Note:
Balochistan’s insurgency persists, with 2025 attacks on CPEC-linked sites underscoring risks. Price in insurance, local engagement, and buffers — solutions lie in inclusive development.
SEZs: Logistics as the FDI Magnet
Successful SEZs globally nail customs clarity, utilities, and logistics. Pakistan’s SEZ Act provides incentives; the edge comes from digital workflows for inspections and exports.
Investor Fits:
- On-zone 3PL concessions for cross-docking and inventory management.
- Hubs for suppliers in textiles or agri-processing.
- E-fulfillment nodes for cross-border e-commerce.
Priorities: Rashakai (textiles, needs cold chain); Allama Iqbal (manufacturing heart, ideal for block trains); Dhabeji (port-proximate assembly).
Risks: Approvals and congestion. Tie logistics KPIs to leases for accountability.
The Mid-Mile Goldmine
E-commerce booms last-mile, but mid-mile — spacious sheds along motorways — is underserved. Build institutional-grade warehouses with solar and smart systems for premium rents.
Cold chain: Pakistan wastes perishables post-harvest. Bankable models blend pre-cooling, multi-commodity stores, reefer fleets, and GCC-compliant packhouses.
Road freight: Formalize with GPS-tracked, green fleets to meet emissions rules and boost efficiency.
Digital Acceleration: From Paper to Speed
Trade tech isn’t buzz — it’s profit. Pre-arrival processing and integrated slots shave days off cycles. Build control towers fusing port, rail, and customs data; add IoT for compliance. Layer fintech for inventory loans.
Policy Pulse: Gaps and Opportunities
Pakistan was omitted from the World Bank’s 2023 LPI (covering 139 countries), highlighting customs and timeliness issues. National policies push intermodals — align investments there for tailwinds.
Funding Smarts: Clearing Risks
Blend MDB debt with PE equity; use revenue-backed structures or anchor tenants. Tap sukuk for warehouses, green bonds for sustainable fleets, and REITs for parks.
Risk Roadmap:
- Macro volatility: Hedge with USD revenues.
- Policy shifts: Anchor in strategies, not deals.
- Security: Invest in local ties.
- Execution: Phase builds with guarantees.
- Demand: Secure LOIs first.
Sector Spotlights with Deal Ideas
- Rail Intermodal: 50-acre Multan ICD with reefer and customs fees — moated by train slots, timely with ADB’s ML-1 push.
- Off-Dock Yards: Port Qasim VAS campus for labeling and storage.
- Cold Chain: Punjab pre-coolers plus Karachi packhouses for GCC buyers.
- SEZ 3PL: Exclusive concessions at Rashakai or Dhabeji.
- Minerals: Bulk terminals for Reko Diq concentrates.
Winning Traits: Operations and ESG
Stand out with SLA-backed metrics and digital visibility. ESG boosts margins: Solar roofs, safe fleets, community training. Partner for skills in rail and cold tech.
Gulf and Asian Edge
Co-create with GCC offtakers; blend capital; think corridors; price risks clearly; leverage MDB standards.
12-24 Month Roadmap
Q1-2: Anchor a corridor and port node with customer MOUs. Q3-4: Secure debt, approvals, EPC. Year 2: Launch phases, hit 80% occupancy, refinance.
Building a Logistics Powerhouse
CPEC isn’t about ceremonies — it’s operational excellence turning nodes into networks. With Phase II’s momentum and multilateral buy-in, Pakistan’s infrastructure is ripening into an asset class. Gulf and Asian investors: Dive in, but with eyes on execution. The rewards? A stake in Asia’s next trade hub.
The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at nazir_shaikh86@hotmail.com