New axle load regime to increase transportation costs by 80 percent

KARACHI: Pakistan Ships’ Agents Association (PSSA) has criticized the implementation of the new axle load regime saying it would do more damage than good under the current situation and result in around 80 percent increase in the transportation costs.

[the_ad id=”31605″]Tariq Haleem, Chairman PSSA, said the initiative had already started to cause congestion not only at the ports but the metropolitan city of Karachi was also suffering as heavy traffic could be seen during the day time on the roads since the same volume of cargo/goods now need about 180 trucks instead of 100 trucks.

“As a result of this initiative shortage of transport has already started with increase in freight rates whereas currently the Pakistan Railways is not equipped to handle the extra volume due to limited wagons and engines. The shortage of trucks combined with 100 percent increase in withholding tax on truck freight and imminent increase in diesel prices due to the depreciating rupee will further increase the transportation rates and it can be estimated that over all the transportation cost can increase by 80-100 percent”.

He said the economy was struggling and with the depreciating value of PKR against the USD, the cost of doing business was already going up. “With the implementation of this load policy the cost of doing business will further increase as there is already a shortage of transport in the country; increase in local transportation cost, since now it will take twice the number of trucks to deliver the same amount of cargo to ports and other key destinations; increased in transit loss due to multiple handling of cargo in most cases”.

Haleem said the increase in cost would not only affect the exports but also contribute to higher inflation as it affect the overall supplies ranging from raw material to finished goods, which were consumed by more than Rs180 Pakistanis.

“The additional diesel consumption will also increase fuel imports and will result in unnecessary strain on our import bill and increase trade deficit. Reputable business houses are predicting overall approximate loss of Rs. 500 billion plus annually to the economy due to this sudden restriction on axle load”.

PSSA urged Prime Minister Imran khan to intervene urgently and instruct the concerned ministry to stop making hasty unplanned decisions, which were resulting in negative impact.

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