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August 14, 2019

Axel load regime feared to cause job, export losses

Business

August 14, 2019

KARACHI: The government’s move to limit load-carrying capacity of cargo trucks is feared to cause millions of job losses for skilled and unskilled labors, while adversely hampering industrial production and impairing revenue mobilisation efforts, shipping agents said.

Pakistan Ship’s Agents Association (PSAA) Chairman Tariq Haleem said cargoes transported in the country by road transportation weigh around 142 million tons while total cargos moved in the country have weight of around 275 to 300 million tons. He feared shortages of trucks due to new axel load limit.

“Trucks shortages will lead to jobs losses for millions of skilled and unskilled workers in 45 plus industries, including sugar and fertiliser industries and result in a huge cut in consumer spending, which will directly affect the indirect taxation on all the consumer products,” Haleem said in a letter to the Prime Minister Imran Khan.

The government restricted goods transporters to slash cargo weights on trucks in the budget announced for the current fiscal year of 2019/20. “Axle load regime would hit Pakistan as fuel bill is likely to increase by $5 billion annually and fruits and vegetable exports fear losses of Rs88 billion.”

PSAA’s chief expressed fear that wheat and sugar supplies would be affected due to shortage of tucks. The association urged the Prime Minister to revisit the new axle load regime, which would harm the economy.

“Axle loads envisaged in the Safety Ordinance 2000 are unrepresentative of wisdom of the stakeholders and separated from the ground realities of Pakistan,” he said. “Therefore, a new law, after performing a reality check of its economic and logistical consequences, is the need of the Naya Pakistan.”

PSAA’s chief said one axle load could lead Pakistan into a complete chaos and civil unrest and more than a trillion rupees in revenue shortfall for the government. “The recent activation for implementation of axle load regime as per the Safety Ordinance 2000 has cancerous economic and logistical adverse repercussions, which need a careful examination.”

Haleem said the axle load regime has two implications: one is the direct increase in the transportation costs and second is the increase caused due to the demand and supply gap of trucks. “Costs and price will escalate due to the latter.”

PSAA’s chairman said demurrage and detention charges born due to congestion at the ports and due to limited availability of tucks to move the cargo outside the ports would also increase the cost and prices.

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