Port upgrades urged to boost maritime trade

Experts say structural changes, tech advancements a must to cut costs, increase trade

KARACHI:

Better port connectivity with inland container networks significantly improves services for local shippers and port productivity-cum ef?ciency, according to ports and shipping experts. They also noted that seaborne trade is rising day by day.

Experts noted that although the global economy, food security and energy supplies are at increasing risk due to vulnerabilities at key maritime routes such as the Suez Canal, Panama Canal, Red Sea and the Black Sea, over 80% of trade volume is carried by sea, making global supply chain heavily dependent on sea trade. In 2023, maritime trade grew by 2.4% reaching 12,292 million tonnes, marking a recovery from a 2022 contraction. However, despite the future remaining uncertain, there is a greater sense of optimism.

All three ports of the country Karachi Port Trust (KPT), Port Qasim Authority (PQA) and Gwadar Port Authority (GPA) must seriously upgrade their facilities to handle the rising seaborne trade and traffic. This includes implementing high-tech facilities and reducing port fees, making the ports more attractive and competitive for increased trade.

Majyd Aziz, former president Karachi Chamber of Commerce and Industry (KCCI), who is also a ports and shipping expert, said, "The port resources need to be allocated for several important upgrades. This includes enhancing the berths, introducing modern equipment, planting mangroves, cleaning up polluted water and the surrounding port areas, and constructing a high-ceiling building at Groyne Yard. These measures will effectively address and eliminate the environmental issues caused by the coal stored in that area."

He said Pakistan's economy is deeply reliant on high imports and growing exports. The key to this lies in the fast, reliable, and cost-effective utilisation of its three ports. Unfortunately, the private sector is disgruntled because, for various reasons, the Karachi and Bin Qasim ports are not actually regarded as facilitative ports. Karachi port, for instance, is usually completely full, with all berths occupied 24/7. Ships waiting at the outer anchorage incur heavy demurrage (which must be paid in scarce US dollars) in addition to the loss of valuable time. Port Qasim experiences a similar amount of activity. Gwadar Port, on the other hand, has yet to attract the desired level of traffic.

"Every day, vessels with cargo enter ports and clear customs, involving numerous stakeholders across multiple jurisdictions. This scenario creates huge opportunities for unethical practices, such as illicit payments, one of the biggest problems faced by shipping companies,"said Aziz. He advocated for reforming the KPT and PQA boards of trustees, suggesting they include more port users instead of political appointees or those without direct stakes. Aziz called for structural reforms in the entire maritime ecosystem. He proposed dividing the port charges into local costs - covering expenses like salaries, maintenance and repairs, etc, and foreign outlay where foreign exchange is involved.

This could save billions in handling costs for goods such as rapeseed, canola, wheat, coal and others, benefiting exporters, importers, and even the government.

Strict monitoring and accountability on the utilisation of tugs, pilot boats, dredgers, and other equipment can help these ports reduce maintenance costs.

Global trade, Aziz said, is currently affected due to disruptions at the Suez Canal, Panama Canal, Red Sea and Black Sea following geopolitical and climate change issues. He said that global trade and supply chain both depend on reliable shipping, which should not be held hostage to contentious issues. Aziz also urged world leaders to stop using this as a strategy for point scoring.