As govt, truckers lock horns, food supplies stranded across the countryside
Dispute over motorway regulations has turned into a supply-chain crisis.
KARACHI:
A dispute between the government and goods transporters has turned into a full-blown supply-chain crisis, with cargo movement to and from the Karachi port grinding to an almost complete halt in the past week. The dispute arose over the enforcement of a revised maximum load limit that commercial vehicles can legally carry.
Transporters are currently on strike across the country after the motorway police mandated that trucks cannot weigh more than 58.5 tons while carrying their cargo. Prior to that enforcement, the upper limit was 80 tons, which included 28 tons as weight of the truck itself. In addition to that dispute, goods’ transporters have also demanded that they be provided with security “in the city, on the motorways and highways.”
Speaking to The Express Tribune, Rice Exporters Association of Pakistan (REAP) Chairman Jawed Ali Ghori said that 1,200 trucks of export rice enter the port city from upper Sindh and Punjab on a daily basis on average. “Each truck carries rice worth approximately Rs1 million,” he said; adding that while transporters had started disrupting rice supplies six weeks ago, the entire supply chain ground to a halt seven days ago.
“The transporters’ strike has affected everyone’s cash flows in the rice business, resulting in mounting receivables and payables,” he said. “It’s a pity that Pakistan’s second largest export industry is held hostage by some unscrupulous elements.”
According to the data compiled by REAP, Pakistan exported rice worth $2.13 billion in 2011-12. Extrapolated from that data, in nominal terms, the estimated value of rice meant for export, but currently stranded in different warehouses of the country, is at least $40.8 million.
In addition to rice, exports of perishable items, such as fruits and vegetables, are also currently suspended because of the strike. According to All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (APFVEIMA) Chairman Waheed Ahmed, 700 containers of kinnow – which were on the way to the port – are currently stranded. Each container is carrying 26 tons of the fruit, Ahmed said. The net estimated value of the kinnows is more than $10 million.
“One ship will set sail on Wednesday, and its cut-off time is today – which means that the fruits are likely to perish,” Ahmed said. The cut-off time refers to the latest time a container may be delivered to a terminal for loading onto a vessel.
He added that 500 containers laden with onions were also stuck because of the ongoing strike. With each container carrying 30 tons, the estimated worth of the exportable onions is approximately $5 million, he noted.
Meanwhile, APFVEIMA has announced that it will not take part in the upcoming Food and Grocery Forum, scheduled on December 12 and 13 in Mumbai, in view of the supply-chain crisis in Pakistan.
According to United Goods Transporters Alliance (UGTA) Chairman Ghulam Yaseen Khan, some nationalist groups allegedly also collect extortion money from truck drivers on a routine basis. Supporting a charter of demand issued by the UGTA, Karachi Chamber of Commerce and Industries President Muhammad Haroon Agar said on Monday that the transporters’ grievances were genuine and should be addressed.
Others severely affected by the ongoing tussle include fertiliser and cement companies. For example, Fauji Fertilizer Bin Qasim Limited (FFBL), which is situated just outside Karachi, has not been able to supply its products to dealers and farmer since December 3.
Similarly, if load restrictions imposed on trucks by the motorway police are not revised, coal transport costs for cement manufacturers may also increase by up to 50%, according to a research note issued by Elixir Securities on Monday.
FPCCI refuses to exercise clout
According to All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association Chairman Waheed Ahmed, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Chairman Fazal Kadir Khan Sherani rudely told him off on Monday evening when the former requested the apex trade body’s president to help resolve the supply-chain crisis.
“Kya hum issi kaam kay liye reh gaye hain?” FPCCI President Sherani allegedly replied to Ahmed’s plea for help. When contacted by The Express Tribune, FPCCI spokesman Shakil Ahmed Dhingra said he knew nothing about any conversation between Sherani and Ahmed.
Published in The Express Tribune, December 11th, 2012.
A dispute between the government and goods transporters has turned into a full-blown supply-chain crisis, with cargo movement to and from the Karachi port grinding to an almost complete halt in the past week. The dispute arose over the enforcement of a revised maximum load limit that commercial vehicles can legally carry.
Transporters are currently on strike across the country after the motorway police mandated that trucks cannot weigh more than 58.5 tons while carrying their cargo. Prior to that enforcement, the upper limit was 80 tons, which included 28 tons as weight of the truck itself. In addition to that dispute, goods’ transporters have also demanded that they be provided with security “in the city, on the motorways and highways.”
Speaking to The Express Tribune, Rice Exporters Association of Pakistan (REAP) Chairman Jawed Ali Ghori said that 1,200 trucks of export rice enter the port city from upper Sindh and Punjab on a daily basis on average. “Each truck carries rice worth approximately Rs1 million,” he said; adding that while transporters had started disrupting rice supplies six weeks ago, the entire supply chain ground to a halt seven days ago.
“The transporters’ strike has affected everyone’s cash flows in the rice business, resulting in mounting receivables and payables,” he said. “It’s a pity that Pakistan’s second largest export industry is held hostage by some unscrupulous elements.”
According to the data compiled by REAP, Pakistan exported rice worth $2.13 billion in 2011-12. Extrapolated from that data, in nominal terms, the estimated value of rice meant for export, but currently stranded in different warehouses of the country, is at least $40.8 million.
In addition to rice, exports of perishable items, such as fruits and vegetables, are also currently suspended because of the strike. According to All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (APFVEIMA) Chairman Waheed Ahmed, 700 containers of kinnow – which were on the way to the port – are currently stranded. Each container is carrying 26 tons of the fruit, Ahmed said. The net estimated value of the kinnows is more than $10 million.
“One ship will set sail on Wednesday, and its cut-off time is today – which means that the fruits are likely to perish,” Ahmed said. The cut-off time refers to the latest time a container may be delivered to a terminal for loading onto a vessel.
He added that 500 containers laden with onions were also stuck because of the ongoing strike. With each container carrying 30 tons, the estimated worth of the exportable onions is approximately $5 million, he noted.
Meanwhile, APFVEIMA has announced that it will not take part in the upcoming Food and Grocery Forum, scheduled on December 12 and 13 in Mumbai, in view of the supply-chain crisis in Pakistan.
According to United Goods Transporters Alliance (UGTA) Chairman Ghulam Yaseen Khan, some nationalist groups allegedly also collect extortion money from truck drivers on a routine basis. Supporting a charter of demand issued by the UGTA, Karachi Chamber of Commerce and Industries President Muhammad Haroon Agar said on Monday that the transporters’ grievances were genuine and should be addressed.
Others severely affected by the ongoing tussle include fertiliser and cement companies. For example, Fauji Fertilizer Bin Qasim Limited (FFBL), which is situated just outside Karachi, has not been able to supply its products to dealers and farmer since December 3.
Similarly, if load restrictions imposed on trucks by the motorway police are not revised, coal transport costs for cement manufacturers may also increase by up to 50%, according to a research note issued by Elixir Securities on Monday.
FPCCI refuses to exercise clout
According to All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association Chairman Waheed Ahmed, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Chairman Fazal Kadir Khan Sherani rudely told him off on Monday evening when the former requested the apex trade body’s president to help resolve the supply-chain crisis.
“Kya hum issi kaam kay liye reh gaye hain?” FPCCI President Sherani allegedly replied to Ahmed’s plea for help. When contacted by The Express Tribune, FPCCI spokesman Shakil Ahmed Dhingra said he knew nothing about any conversation between Sherani and Ahmed.
Published in The Express Tribune, December 11th, 2012.