Seaports are the lifeblood of global trade, serving as critical nodes in the supply chain that connects producers to consumers across the World. Pakistan, with its strategic location at the crossroads of South Asia, Central Asia, and the Middle East, possesses immense potential to harness its seaports for economic growth and prosperity. However, realizing this potential requires substantial investment and strategic planning to upgrade infrastructure, streamline operations, and enhance efficiency.
Seaports are the lifeblood of global trade, serving as critical nodes in the supply chain that connects producers to consumers across the World. Pakistan, with its strategic location at the crossroads of South Asia, Central Asia, and the Middle East, possesses immense potential to harness its seaports for economic growth and prosperity. However, realizing this potential requires substantial investment and strategic planning to upgrade infrastructure, streamline operations, and enhance efficiency.
Recent assessments by the World Bank shed light on the challenges and opportunities facing Pakistan’s logistics sector. The Karachi Ports Supply and Demand Assessment underscores the need for investments in Karachi Port Trust (KPT) and Port Qasim Authority (PQA) to meet growing cargo demands. While the capacity of these ports is projected to suffice until 2030, expansions and improvements are imperative to ensure continued competitiveness.
Moreover, the “Competitiveness of South Asia’s Container Ports” report emphasizes the significance of efficient port logistics in enhancing trade, attracting investment, and stimulating economic growth. South Asia, despite experiencing a surge in trade, lags behind other regions due to inefficient container ports. Addressing these inefficiencies through productivity enhancements and private sector participation is paramount for unlocking the region’s economic potential.
Pakistan’s seaports require significant investments to upgrade facilities and meet global standards, aiming to enhance competitiveness in shipping services. According to government estimates, transport, contributing 10 percent to GDP and employing over six percent of the population, is crucial for Pakistan’s economy. With road transport dominating, railways’ involvement is minimal.
Pakistan’s extensive coastline and unexplored economic zone offer potential. Port Karachi and Port Qasim handle 95 percent of international trade, with Gwadar Port set to become a key hub for the China-Pakistan Economic Corridor. However, the transportation network lacks balance and fails to meet diverse needs, costing the economy an estimated 4–6 percent of GDP.
Challenges such as congestion, inadequate handling capacity, and outdated technology must be addressed to harness the full potential of these ports.
Recent investments in Pakistan’s logistics sector, exemplified by projects like the Karachi Gateway Terminal Limited (KGTL), demonstrate the transformative impact of strategic investments. The KGTL’s ambitious plans to enhance efficiency and capacity through technological integration and operational improvements signify a step towards meeting global standards and improving competitiveness.
Efforts to optimize terminal operations, reduce shipping costs, and enhance warehousing and logistics infrastructure are central to Pakistan’s quest for economic growth and competitiveness.
The potential gains from enhancing port efficiency are substantial, as evidenced by the World Bank’s projection of a significant decrease in maritime transport costs and increase in exports if South Asian container ports perform at their best. As Pakistan positions itself as a regional logistics hub, strategic investments in the sector are essential to unlock new opportunities for growth and prosperity.
A detailed analysis of Logistics Performance Indicators (LPI) 2023 reveals Pakistan’s significant lag behind other nations, notably in customs clearance, shipment tracking, timeliness, infrastructure, and accessing international shipments and third-party logistics (3PLs) services.
Customs clearance emerges as a major bottleneck, hindering smooth trade flow. Tracking mechanisms are deficient, affecting supply chain transparency. Timeliness issues disrupt operations, while infrastructure limitations impede trade volume handling. Difficulty in accessing efficient international shipments and 3PLs services adds to challenges.
Pakistan’s LPI ranking falls even below neighboring countries like Bangladesh and Sri Lanka, urging urgent reforms for sector revitalization.
In conclusion, Pakistan’s journey towards economic growth and global competitiveness hinges significantly on the development of its logistics sector, particularly its seaports. By addressing infrastructure challenges, embracing technological advancements, and fostering private sector participation, Pakistan can realize its potential as a key player in global trade and commerce.
The writer is a staff member
