INP-WealthPk

Dry Ports – Key to Promoting Trade Activity

January 26, 2022

By Jawad Ahmed ISLAMABAD, Jan. 26 (INP-WealthPK): Dry ports play a key role in promoting trade activity, thus making them an important part of the global supply chain. In Pakistani contest for the dry ports to be utilised to their full potential, there is a need to put in place a world-class rail and road network. Pakistan does not have a well-developed railway infrastructure to withstand the fast-growing freight activity. However, to help the country overcome this challenge, China has stepped in. The government has launched the Main Line, commonly known as M-1 project, which will see dualisation of the railway track from Karachi and Peshawar and onward to Haripur, where the Havelian Dry Port is being built in the vicinity of the Baldhair railway station, about five kilometres from Haripur city. The port is designed to meet the demand of the containerised future freight traffic between China and Pakistan under the China-Pakistan Economic Corridor under the Belt and Road Initiative. The M-1 project costing about $6.8 billion envisages removing level-crossings and construction of bridges and fencing of the railway tracks. The Havelian Dry Port will not only ensure the safe storage and processing of freight containers, but also boost trade activity and generate the much-needed revenue for Pakistan. Over the past two decades, free trade agreements (FTAs), economic integration, as well as new marketing tactics have not only increased the demand for commodities, but also have amplified the need for more efficient transportation infrastructure and services. At the same time, the number of container ships has increased, and the available space for maritime transit has shrunk. As a result, improving the efficiency of the hinterland transportation system has become a key challenge. Dry ports, an important part of multi-modal transportation systems, promote economic activity and act as crossroads for backward and forward trade linkages. Many countries, particularly those near the transit states, are beginning to embrace this approach. According to a report of the United Nations Conference on Trade and Development, the greatest containerised throughput handled in Asian ports was 64% in 2017, and it has steadily increased since then. Despite the fact that containerised trade is complex and even slow in terms of speed, the use of containers for shipping goods has shown to be cost-effective and capable of transporting large amounts of commodities over long distances. Containerised shipping is undoubtedly a result of globalisation, as well as rising demand and supply. Though Pakistan has three seaports, including Karachi Port Trust (KPT), Bin Qasim and the Gwadar Port, the country also relies on dry ports for efficient cargo shipment. KPT and Bin Qasim handle almost 95% of national import and export cargo. Whereas, Gwadar Port, which is being developed, will provide a linkage not only between Pakistan and China but between other countries of the region. The KPT witnessed a growth of 25% in the financial year 2021 as container handling at the port was 2.29 million TEUs (twenty feet equivalent unit), which was the highest in KPT’s history. However, the ports are getting congested as a result of increased traffic and insufficient cargo handling capacity as container dwelling times are still high. Moreover, the cargo freight has completely shifted towards containers. Port improvements made to meet the demands of growing containerised traffic are often inadequate. Container throughput would be added to Gwadar Port once it becomes fully operational with the help of the Chinese government. In the seaborne trade, China has already established a strong position. Shanghai port of China was the busiest port in the world in 2019, as it has registered the highest container throughput for the tenth year in a row.