DECLARATION OF TRUCK SECTOR AN INDUSTRY

EXPERTS FORESEE EFFICIENT CARGO HANDLING FACILITIES

TARIQ AHMED SAEEDI - tariqsaeedi@hotmail.com
Jan 14 - 20, 2008

Truck fleets in Pakistan are considered under performing inhibiting efficient cargo handling facility and realization in potentials of economic growth. The heavy and light trucks are used to transport trade consignments from one place to another. Total number of registered trucks in Pakistan does not cross a 200,000 figure. The biggest factor underlying to this under performance is time-delay in fleet replacement. Recalling the major obstacles in the growth of trucks fleet, Adil Shah, Deputy General Manager Sales & Marketing, Hino Pak said, incidentally Pakistan is one of the countries where such time-delays expand to often over 20 or 30 years creating multitudes of growth's hindrances. Normally in Pakistan rundown models of trucks and heavy commercial vehicles with intermittent overhauling manage to tremble on roads for years. He explained on one hand it makes unable for truck assemblers to fully utilise its line production facility. And, local industries become unable to meet capacity utilization. On the other hand the dilapidated conditioned fleets increase transportation time of trade consignments besides causing unnecessary fuel consumption and pollution in the environment.

NON CAPACITY UTILIZATION: The issue of non-utilization is not limited to truck fleets only rather overall local automotive industry of Pakistan is not fulfilling local demands despite having capability otherwise. There are six light and heavy truck assemblers operating in the country. They are Hino Pak, Ghandhara, Sindh Engg, Master, and Isuzu. Installed capacity of assembling of trucks in the country is 26,900 units. Only Hino Pak has capacity to assemble around 6,000 trucks per annum while last year it assembled around 2,000 units. Ironically, installed capacity of production of trucks in the nation is hardly meeting local demand while aggregate production of trucks exceeds not over 4,000 per annum. According to a source, demand of almost 10,000 units is generated nationwide annually. It is certain that rest of the demands are filled up by imports that include complete built-up unit and completely knocked down kit. An auto expert said import does not matter but it should not be at the cost of local industry. Automobile parts and accessories are imported without declaring its real purpose to shape them wrongfully into running logistic, he added.

The government of Pakistan has in a recently issued statutory regulatory order declared trucking sector as industry. Entitlement of industry brings forth range of special privileges and incentives to encourage investments and technological advancement. Usually it is happened to leverage potentials of an under performing economic sector. The government notified trucking sector as an industry as part of the National Trade Corridor Improvement Programme (NTCIP). This would facilitate truck fleet operators to get lending from commercial banks at competitive rates and would encourage the sector to organise itself and to have much needed investment. Engineering Development Board (EDB) described Pakistan's logistic base as under-developed inhibiting realisation of the country's full economic growth potential. The government had approved the trucking policy, prepared by EDB, which aimed at to reform and promote persistent modernisation of the trucking sector. EDB believed this initiative would help modernise trade and logistics of the country and to make Pakistan a regional hub for international trade. This would also facilitate fleet operation at competitive rates. Apart from this insurance coverage encompassing trucking fleets would be ensured in addition to applicable tax incentives. For forming business-conducive atmosphere and to attract foreign investment in national fleet operation utilities at industrial rates instead of commercial rates would be provided.

While talking about the government's initiative, Abdul Waheed, Director General, Pakistan Automotive Manufacturers Association said this is a positive step of the government, which would lead to modernization in production of trucks. This would instil a major transformation in fleets operation across the nation. "Also, the industrial privileges will pave the way for new entrants to come and new technology to land in the local sector."

Talking about the issue of capacity utilization, he said, amnesty assigned to import of CBUs of high commercial vehicles is grossly attributable to under utilization of indigenous production capacity. Whatever the number of units produced locally have to cut short because of an import addition, he insinuated. "Definitely, government is concerned of the situation and rectifying adequate resolutions to the problem. It had taken an alternative policy decision in this regard. "But, after all it would take time in realization of any policy."

According a report, presently there are around 136,000 registered commercial trucks (3% of total vehicles) plying on the roads. Since there is no adequate truck manufacturing industry in Pakistan, types and makes of these trucks have variations in design. Bodies are mostly manufactured in Pakistan by local Industry not following proper dimensions. Bed Ford (53%), Hino (23%), Nissan (16%), Isuzu (5%), other (3%) are common types of trucks.

A study revealed that there is a trend in the commercial market to use multi axle trucks instead of 2-axle. In 1982, share of 2-axle was 96.5% that reduced to 69% in 1995, whereas share of multi axle trucks increased from 4% in 1982 to 31% in 1995. Premature pavement failures of highways and its rehabilitation and maintenance are certainly caused because of over loading. Axle load study NTRC conducted in 1995 indicates that 88% of trucks are loaded above the designed limits of 8.2 tons and 43% above the axle load limits of 12 tons. Various studies nave indicated that 2 axle trucks (rough: 69% of total fleets) cause most of the damage to pavement structure because of load distribution mainly on rear axle. In addition to higher loading and to multiply its effect, tyres are over inflated far in excess of their normal pressure capacity. Studies revealed that almost 100% of the tyres are inflated in excess and are mostly as high as 160 psi against permissible design limits of 100 psi.

Economic managers are in a better position to understand the reality of untapped potentials that could be sprung off following declaration of truck sector as an industry. This ascendancy of position should also consider that operators of fleets play an important role to cooperate government's efforts to materialize industrial privileges promised to them.