Shipping only cost-effective, sustainable delivery mechanism for int’l trade, economy

PAKISTAN Commemorated World Maritime Day on 3rd October 2017, under the Auspices of Chartered institute of logistics and transport, institute of chartered ship brokers at P.C. Hotel Karachi.
The day is celebrated on 28th September at U.N. IMO Headquarters, London, to be followed by celebrations in the member countries. The theme for this year’s World Maritime Day is “Connecting Ships, Ports and People”. This year’s theme was chosen to provide an opportunity to focus on the many diverse stakeholders involved in the shipping and logistics sectors. Its aim is to build on the World Maritime Day theme for 2016, “Shipping: indispensable to the world”, by focusing on helping IMO Member States to develop and implement maritime strategies to invest in a joined-up, interagency approach that addresses the whole range of issues, including the facilitation of maritime transport and increasing efficiency, navigational safety, protection of the marine environment and maritime security. Tributes to organizer taking lead to celebrate the day in Pakistan, enable bring awareness to the common people and to those at the helm of affairs.

According to the United Nations Conference on Trade and Development (UNCTAD), around 80% of global trade by volume and over 70% of global trade by value are carried by sea and are handled by ports worldwide. These shares are even higher in the case of most developing countries. Shipping is the only truly cost-effective and sustainable delivery mechanism for international trade and the global economy. People all over the world rely on ships to transport the commodities, fuel, foodstuffs, goods and products that are so vital in their everyday lives. The shipping activities that I am referring to encompasses containerized multi-modal cargos, bulk and break-bulk goods, liquid commodities and the all essential project consignments.
The promotion of sustainable shipping and sustainable maritime development is one of the major priorities of IMO in the coming years. Therefore, energy efficiency, new technology and innovation, maritime education and training, maritime security, maritime traffic management and the development of the maritime infrastructure: the development and implementation of global standards covering these and other issues will underpin IMO’s commitment to provide the institutional framework necessary for a green and sustainable global maritime transportation system for the years and time to come.
There is indeed no denial that without efficient ports and logistics, shipping alone cannot remain viable and efficient. Similarly, we need to appreciate the concept of multi modal transport coupled with efficient supply chain management.Pakistan is blessed with two major ports, the first at Karachi and second at Bin Qasim. These ports collectively handle substantially all the sea borne cargos to and from Pakistan. The scenario is destined to change very soon with the full scale operations of the port at Gwadar and also with the sequential completion of the various projects under the CPEC initiative which is a part of the greater “One Belt – One Road” initiative. A flavor of what this change could look like has already been witnessed in the form of SAPT, the new deep sea container terminal currently being operated by Hutchison Ports which is operating four containerized berths on PPP/BOT basis efficiently. It is expected that SAPT, being deep water port may achieve the target of being a regional container hub. The Government of Sindh is equally keen to develop Keti Bandar at the Indus River Delta for which significant work remains to be done.
I had the honor and pleasure of recently being invited by the Pakistan Navy War College at Lahore to speak on topic “ How Sea blindness among leadership could affect Pakistan’s focus towards investment in maritime sector”. It was good inter active session with Senators, MNAs, MPAs, senior military and civilian officers in attendance. I reiterated what I said at Lahore that we as a nation have failed to develop shipping entrepreneurship due to inconsistency in our policies and also in the backdrop of trauma of nationalization of private sector ship owning. However, it is high time we look towards the future with a view to correct the errors of the past and to accord the importance to the shipping sector that it rightfully deserves.
We must learn from history that the British gained access in India in 1607, when their sailing ship Hector berthed at Port of Surat commanded by Capt. William Hawkins and gradually, the East India Company gained the physical territory and political grounds and end up creating an empire, thus importance of shipping is paramount and cannot be denied.
Pakistan has progressed in the port sector, but sadly the local private sector is unwilling to invest in ship owning. One must recall that between the mid 1950s and early 1970s, Pakistan had a vibrant shipping industry and that several Pakistan maritime experts took up senior management level employment in other countries to establish their shipping sectors. It is encouraging to note that the only Pak Flag bearer, PNSC, has excelled by making consistent profits inspite of being in public sector. We are proud of our PNSC as in the region Bangladesh Shipping and Ceylon Shipping are liquidated and the Shipping Corporation of India, being in Public Sector, but incurring loss, whereas PNSC is making profit with its professional team. However, one must also question how investment from the private sector can be attracted towards ship owning in Pakistan.
If our government is serious about ensuring participation from the private sector into the shipping sector, then a consistent policy regime is imperative. Funding by Banks/DFI at low interest rates is required as ship owning is capital intensive, has low IRR and long payback periods. I strongly recommend that the government engage in brain storming to remove impediments for growth of ship owning in private sector and that a think tank be set-up at the Ministry of Ports and Shipping level to come up with suggestions to resolve this and similar issues. Let the public sector compete with private sector in healthy way.
There is no denial that we need efficient ports, logistics and shipping industry to support our national trade. The aim is to reduce cost of doing business and improve global competitiveness. The aim should also be to develop self-sufficiency, strong local infrastructure and to support job creation.