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Maritime transport: serving as an example

Maritime transport, which plays a vital role in the development of the country, comprises ports, shipping, shipbuilding and ship repair, and inland water transport systems. The growth in international trade and removal of trade barriers have made the developing countries to concentrate more on the improvement of their infrastructure, like roads, airports, seaports, which play a vital role in the development of the economy. Product storage, along with the capacity to move large shipments, have placed the shipping industry in a very advantageous position these days. However, the development of shipping industry in a country also depends on its population density, economic advancement and many other inter-related conditions, like port and refueling capacities.

Pakistan’s shipping industry is facing severe challenges on multiple fronts. Pakistan’s shipping industry has devolved to a point where there is only a single, government-owned, shipping company active in the market these days. Despite various interspersed attempts by Pakistan’s government over the years, Pakistan’s shipping industry still hasn’t recovered from the devastation wrought by 1971 nationalization of shipping industry. In order to restore Pakistan’s shipping industry to good health, a decisive action is required. Local industry and particularly Pakistan National Shipping Corporation (PNSC) should be sheltered and protected from the global headwinds until it achieves the critical mass necessary for it to compete internationally. Maritime laws should be enacted which should give preference and protection to vessels flying Pakistan’s flag. Unlike the current Merchant Marine Policy, legislation should be drafted to explicitly enforce United Nation’s recommendations on shipping.

The involvement of shipping from and to Pakistan remains small despite the fact that Pakistan is strategically located and can provide a hub for various countries. In Sweden maritime transport is estimated to handle about 90 percent of international trade and Pakistan can show a similar high dependence on shipping for the foreign trade to support various land locked countries in the region. Shipping, i.e. the ownership of the ships that carry merchandise, has become one of the most international activities in the world.

There is a possibility to increase the movement on Pakistan’s seaport with a number of large ships that can call at Pakistan’s seaports, and especially for rapid development of oil handling for CPEC. More shipping activities in coastal waters and larger volumes handled in ports increases the risk of accidents and of degradation of the coastal environment. Hence, risks that will increase dramatically if a larger number of ships trading in the region are sub-standard. However, coastal pollution does not arise exclusively from shipping activities. Pakistan should make laws to cover the pollution and degradation of the coastal environment.

As a matter of fact, the shipping industry in Pakistan is facing significant tax burden. There are also international regulations on operations of ships, such as International Convention for the Safety of Life at Sea, International Convention for the Prevention of Pollution from Ships, Convention on the International Regulations for Preventing Collisions at Sea, International Ship and Port Facility Security Code, and International Safety Management Code. Domestically, there are several acts that regulate the Pakistan’s shipping industry. Besides, there are also other statutes that govern the shipping industry indirectly. The wider regulatory framework makes stricter entry barriers into the industry, and adds cost to the compliance of such regulations.

High transportation costs, port delays, poor turnaround time of coastal ships on account of over-aged vessels, and inadequate mechanical handling facilities are some of the other reasons for the declining share of Pakistan’s shipping tonnage in country’s overseas trade. Continued slippage in the share of Pakistan shipping in the carriage of country’s overseas trade is in turn causing a drain on precious foreign exchange in terms of payment of freight charges, which could otherwise be used for other high priority imports or for building up indigenous infrastructure. One of the major reasons for the declining share in overseas trade has been the age profile of the shipping vessels in Pakistan. Majority of the Pakistan’s shipping fleet contains ships which are over 30-35 years of age. This reduces the competitiveness of Pakistani vessels as compared to the foreign vessels. The increasing size and sophistication of ships and port facilities require heavy capital investment, which is one of the major problems faced by Pakistan’s shipping industry.nother major problems faced by the shipping industry is the shortage of manpower. Pakistan is not able to provide adequate number of seafarers to man Pakistan flag vessels. This is mainly because not enough young people seem to find seafaring an attractive and appealing career with many of the officers preferring to sail on-board foreign flag vessels due to better salary packages. The only way the shortage of seafarers can be managed is by creating a workplace environment that is attractive to applicants, and corporate values that are aligned to wider social interests. Though the bulk of Pakistan’s trade is carried by sea routes, the existing port infrastructure is insufficient to handle trade flows effectively. The current capacity at major ports is also overstretched. There is a need to build more seaports in Pakistan besides making Gwadar seaport fully functional.

Another major challenge faced by Pakistan’s shipping industry is the relatively low hinterland connectivity with the ports. Pakistani ports are finding it difficult to handle additional traffic because of slow evacuation from the Karachi ports. Therefore, it is important that connectivity of major ports with the hinterland is augmented not only to ensure smooth flow of traffic at the present level but also to meet the requirements of projected increase in traffic. The old ships are being used by the ship owners primarily due to low investment capacity to buy new ships, and the tremendous shortage in the availability of ships. Usage of old ship is highly risky apart from being operationally more expensive. Further, several countries around the world have banned certain class of ships, as per their build and age, to be operated from their ports.

Shipbuilding acts as a catalyst for overall industrial growth due to spin offs to other industries, including steel, engineering equipment, port infrastructure, trade and shipping. The dynamics of Pakistan’s economic growth (if government wants to concentrate on economy) can create a demand for new ships, most of which will have to be built abroad, due to inadequate indigenous capacity. On the other hand, the benefits to Pakistan’s industry and potential for employment generation from shipbuilding and the associated ancillary industry can grow manifold, if Pakistan builds ships for meeting its entire tonnage requirements. It is important to note that the economy today is experiencing more and more trade related activities. Hence, overall logistics development has become very essential, especially in the transportation sector. In order to be competent with the other countries, Pakistan needs to offer exemplary transportation services along with logistics services by integrating the system properly.

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