MODERN WAREHOUSING & LOGISTICS
The Services sector of Pakistan contributes to more than 50 percent of the national GDP which also supports the Agriculture and Industry that individually contribute to more than 20 percent and collectively contribute to more than 40 percent in the GDP. The services sector has provided steady support to the Pakistan’s economic growth. In the age of globalization and technology, Services sector is the real engine for growth as it contributes two-third to global economies playing vital role for economic progress and prosperity.
In this modern era, the Warehousing Logistics as emerged as full-fledged “ALLIED INDUSTRY” to support mainly to the Manufacturing industries. The Warehousing Management envisaging the complete supply chain goes side by side with Logistics. Both the industry and agriculture sector are dependent on the Warehousing & Logistics Management which encompasses the imports, manufacturing, storage, distribution, exports as well as transportation to the wholesale and retail network in the country. Currently, the Manufacturing sector is robustly supported by the Warehousing & Logistics sector covering its imports, local supplies, movement/ transportation of raw materials, semi-finished and finished products and distribution/ transportation to buyers and end-consumers.
With huge capital investment, revenue generation for the Government and creating huge employment opportunities for the citizens, special Value-added services have been introduced and established to transform the Warehousing & Logistics on international standards with upgrading of inventory management and storage on modern lines with latest tools, equipment and machinery. Establishment of purpose-build and temperate-control warehouses are revolutionary moves to support all the segments of the economy. Cool-Chains/ Temperature controlled warehousing and specialized logistics have become mandatory requirements for both the agriculture and industrial sector. Billions of Rupees have been heavily invested by the local and foreign investors in the modern Warehousing & Logistics.
Supply Chain Management
Local businesses are looking maximize the value generated by the organization, and so look towards logistics companies for outsourcing levels of their supply chain to free up their resources.
Significant Railway Network
The railway network totals 7,791 km. With the continued strong domestic economic growth and the ongoing reforms in Pakistan Railways, there exists a great potential for the rail sector to play an important role in the sector.
Public Private Initiatives
The establishment of the Bureau of Infrastructure Development (BID) has been proposed, which will coordinate and oversee the programme for private sector participation in infrastructure development.
Strategic Geographic Location
Located at the crossroads of Afghanistan, Central Asia, the People’s Republic of China, India, and Iran, Pakistan has huge potential to become a hub for regional transport and trade.
INVESTMENT IN SUPPLY CHAIN/ WAREHOUSING & LOGISTICS
The strategic, tactical and operational levels of supply chain management hold the utmost importance in todays’ competitive environment. It is vital to maximize the value generated by the organization, satisfying customer demands while also minimizing cost and maximizing profitability. The alignment of purchasing, manufacturing and distribution roles needs to be determined and fully understood by companies in order to be able to achieve competitive advantage and other business benefits. Also, cost control plays an important part therefore more companies look towards warehousing and logistics companies for outsourcing their business at the same time freeing their assets as well as human resources.
Multinational as well as local companies fall under the clientele of warehousing & logistics companies. Varieties of needs are catered to from various industries including: Cotton, textiles, leather products, sports goods, surgical goods, handicrafts, rice etc. fall under the main exports. Plant & machinery, pharmaceuticals & electrical components as far as the main imports are concerned. Small and medium sized businesses as well as corporate clients fall under the category of the customer base of this industry.
The WAREHOUSING SECTOR had not developed previously on modern lines because the ports were giving long free times to the trade. Today the containerized vessels take no more than 18 or 20 hours to discharge and reload and so the government reduced it from a ten days period to five days. Modern warehousing structures are now coming up fast in Pakistan to meet the requirement of efficient storage solutions and increasing throughput requirements, and thus great opportunities exist in this area with the most important factor for companies in today’s market to ensure they are close to their end consumer markets and therefore are ready to take advantage of efficient solutions.
Temperature controlled warehousing & Logistics
Pakistan presents the greatest opportunities for cold chain logistics and the report on Global Cold Chain Logistics 2012-13, had found that supply chains in the countries like Pakistan, India, China, Vietnam, etc. are extremely under developed, particularly those for refrigerated food stuffs. 50% of dairy produce, fruits and vegetables are lost or spoilt because of poor storage, handling or transportation. Similarly, the lack of cold storage or cool chain and temperature control warehousing is hampering the development of this sector. There is also lack of refrigerated vehicles, limiting the volume of temperature sensitive goods that can be transported throughout the country. Cold Chain Logistics not only serves the agro based industries (primary agricultural food accounts for 21% of Pakistan’s GDP) but is also a vital factor for dairy (Pakistan is the 4th largest milk producing country), pharmaceutical, FMCG, confectionery and food related industries.
Cold Chain Warehousing and Logistics players play a key role in this sector by offering integrated solutions for these cold chain products. More and more cold storage warehouses are coming up to meet international standards and provide cost effective solutions to the trade. However, there is plenty of potential demand to be fulfilled and thus plenty of opportunities. Railways are barely being utilized for the transportation of perishable goods. This gap highlights a great opportunity for Warehousing, Supply Chain Management & Logistics companies looking to enter the market.
(Ref/Source: Profiles – Warehousing, Supply Chain Management & Logistics – www.invest.gov.pk )
According to information and statistics of the Board of Investment of Pakistan, Logistics & Warehousing Management contributes 22.3% of the services sector GDP and accounts for approximately 6% of the nation’s total employment. Gross Domestic Product (GDP) growth is 5.3% in 2016-17. International transport is connecting Pakistan via its border crossings, ports and airports to its neighbouring countries and further abroad. Pakistan’s economy relies on these international connections, including a large Pakistani workforce in the Gulf States that fly in and out. In addition, there is a growing emphasis to increase trade with the Central Asian region.
The Opportunities exists and offered are in Supply Chain Management whereby local businesses are looking maximize the value generated by the organization, and so look towards logistics companies for outsourcing levels of their supply chain to free up their resources.
Pakistan’s Strategic Geographic Location at the crossroads of Afghanistan, Central Asia, the People’s Republic of China, India, and Iran, Pakistan has huge potential to become a hub for regional transport and trade.
Key information: (Vision 2025, Annual 18-19 Plan & 11th Five Year Plan (2013-18)
- Logistics and transport investments are being supported through the China Pakistan Economic Corridor (CPEC) programme.
- Development of modern and efficient trade facilitation and logistics services.
- Maximizing the support of the ports to external trade by reducing ports and ship handling charges, and developing port facilities that allow all types of ships to call at the country’s ports
- Improve transport and communication by constructing national trade corridors and provide mass transit facilities in all major cities.
(Ref/Source: Pakistan Board of Investment – www.invest.gov.pk )