FPCCI Calls for Urgent Reforms to Modernize Pakistan’s Logistics Sector and Boost Trade Competitiveness Atif Ikram Sheikh, President FPCCI

Karachi: Mr. Atif Ikram Sheikh, President FPCCI, has apprised that the
Policy Advisory Board of the Federation of Pakistan Chambers of
Commerce & Industry (PAB-FPCCI) has unveiled its latest policy brief,
“Pakistan’s Logistics Performance and Its Impact on Trade
Competitiveness,” warning that Pakistan’s logistics sector which
contributes 15.6 percent to GDP has become a major structural
bottleneck to trade and investment in the country. In contrast, logistics
accounts for only 8–9 percent of GDP in advanced economies like the
U.S., Japan, and Singapore, underscoring Pakistan’s disproportionately
high costs, inefficiencies, and its overreliance on few sectors.

Mr. Atif Ikram Sheikh highlighted that Pakistan’s alarming decline in the
World Bank’s Logistics Performance Index (LPI), where it fell from
rank 68 in 2016 to 122 in 2018, one of the steepest drops in the region.
Most concerning is Pakistan’s complete exclusion from the 2023 LPI
due to inadequate data and poor stakeholder engagement, a development
that damages the country’s credibility with investors and trading
partners. Meanwhile, competitors such as India, Vietnam, and
Bangladesh have steadily improved their logistics systems, securing
deeper integration into global value chains.

According to the study, over 94 percent of Pakistan’s cargo moves by
road, compared to just 6 percent by rail, even though rail is cheaper,
safer, and more sustainable. Pakistan Railways has seen its operational
locomotives shrink from 528 in 2011 to 449 in 2025, while freight
volumes have dropped from 7.4 million tonnes in 2019–20 to only 5.8
million tonnes in 2024–25.

Mr. Atif Ikram Sheikh emphasized that the port inefficiencies also weigh
heavily as Karachi Port and Port Qasim, which handle more than 95
percent of external trade, operate at barely one-third capacity, with
average container dwell times of 5.5 – 6.5 days compared to 2.6 days of
India’s import dwell time, Bangladesh’s export dwell time of 1.6 days
and Vietnam’s export dwell time of 4 days. Gwadar Port, despite its
strategic location under the Belt and Road Initiative, accounts for less
than 0.5 percent of national trade due to poor hinterland connectivity and
limited supply chain integration.

The report further estimates that Pakistan loses 30–40 percent of its
fruits and vegetables post-harvest because of inadequate warehousing
and cold-chain facilities. This not only undermines food security but also
restricts agricultural export potential. Similarly, industries such as
dimensional stones, with an estimated export potential of USD 1–1.5
billion, remain constrained by the absence of dedicated freight corridors
and mechanized mining.

To address these challenges, Mr. Atif Ikram Sheikh have proposed a
comprehensive reform roadmap. This includes granting industry status
to the trucking sector to enable fleet modernization through formal
financing, establishing a National Logistics Authority to unify oversight
across fragmented ministries, expanding warehousing and cold storage
capacity near ports and production hubs, positioning Gwadar as a
regional transshipment hub, and strengthening systemic capacity through
modern drivers’ training institutes and digital freight-matching
platforms. The report also calls for urgent modernization of Pakistan
Railways through upgraded rolling stock, improved signalling systems,
and digitalized cargo monitoring to restore rail as the backbone of
long-haul freight transport.

Mr. Atif Ikram Sheikh strongly emphasized the need to link Karachi Port
and Port Qasim with Pakistan Railways through dedicated freight
corridors, ensuring that all cargo bound for the hinterland is
complimented by train as well. Developing a port-to-hinterland freight
corridor outside Karachi would not only cut long-haul transport costs but
also significantly ease urban traffic congestion within the city.

“Efficient logistics is the backbone of competitiveness,” the FPCCI
emphasized, warning that without systemic reforms Pakistan will
continue to lag behind regional peers. The Federation stressed that
logistics sector reforms and railway modernization are prerequisites to
achieving the government’s vision of scaling Pakistan’s economy from
USD 411 billion to USD 1 trillion, reducing supply chain costs, and
unlocking the country’s full trade potential.