Creditable railway goods transport system to improve ease of doing business

LAHORE: Cumbersome and expensive procedures have made the dry ports in the country redundant, forcing the upcountry importers to clear their goods at the sea ports and bring them to upcountry destinations through road transport.

Among many impediments the first is the non-functional Railways that operate an erratic goods service from ports to up country. Pakistan needs a creditable Railway Goods Transport system that operates on the same strict schedule on which the passenger train service operates.

Railway wagons are stationed at all births of seaports and the goods meant for far away destinations are directly loaded on these wagons from the ship. All these wagons then are joined together and attached to a Railway engine that takes them to the destination at a scheduled time every day.

The load of import in Pakistan is so high that one or two trains should leave for upcountry every day.

The efficient transportation through Railways would save importers millions of rupees they have to pay as penalty to the shipping line for delay in return of the containers.

Railway is the cheapest mode of goods transport around the world. Since Pakistani businessmen mostly depend on road transports they have to incur heavy transportation cost.

In fact, the cost of a container from Karachi to Shanghai is less than the transportation of the same container from Karachi to Lahore. Road transport the world over is used for short distances only.

A Railway wagon accommodates six containers and an engine is capable of pulling 25-40 wagons. It saves lot of fuel, plus the train travels on dedicated line without any traffic hassles faced by the trucks.

Pakistan needs to activate its dry ports to spare its seaports for handling transit goods; for landlocked Central Asian Republics, Afghanistan and parts of China; it would also engage 70 percent of the customs staff stationed outside seaports.

The current position is such that if an importer wants the goods to be cleared in Lahore then he has to arrange transhipment through bonded container. The freight charged by the bonded container from Karachi to Lahore is three times the freight charged by Railways goods train for a 20 feet container.

Train freight services are uncertain. The importer has to pay port handling charges at Karachi and then at Lahore dry port.

Since bonded containers are limited, the importer has to wait for few days to arrange bonded transport and pay storage charges to port handler. The Railways charges less freight, but schedule is uncertain.

Sometimes goods remain lying on goods train for two to three weeks before it leaves the port. Most of the importers instead get their bonded goods cleared at Karachi and bring them upcountry in private transport that is 30 percent cheaper than bonded transport.

The shipping lines charge in US dollars per day if the empty container is not sent back within 10 days of unloading at the seaport.

The charges start with $60 a day and increase to $100 per day if the clearance of the consignment is delayed due to any dispute with customs. In case the importer wins the dispute, the storage charges are waived by the customs but the penalty of late delivery of container is borne by the importer.

All these hassles at dry ports add to the cost of the businesses. The responsibility of the delivery of goods at the designated port of clearance (whether seaport or dry port) is the responsibility of the shipping lines the world over.

The shipping lines are better equipped than the private licensed transporters of Pakistan to ensure safe and intact delivery of goods to designated port. This would not only speed-up the delivery but also reduce cost.

The dry ports would become active and congestion at seaports would be reduced. The state should force the shipping lines to act according to global norms in Pakistan.

Dry Ports are proving to be a liability for the government, as the majority of importers are not using these facilities due to higher cost they are forced to incur, and long delays in dispatch of goods.

Presently, the dry ports in the country are used sparingly only for few imports, while 90 percent of the goods meant for exports from upcountry or imports to upcountry are cleared at the sea ports and then dispatched through routine transport to upcountry where dry ports exist.

About 70 percent of customs staff posted outside seaport handles 10 percent goods, while remaining 35 percent clears 90 percent goods.