Headline Industry Data

• 2012 tonnage throughput at the Port of Karachi is forecast by BMI to grow by 0.81% to 44.64mn tonnes.
• 2012 container throughput growth at the Port of Karachi forecast to increase by 1.42% to 1.54mn twenty-foot equivalent units (TEUs).
• 2012 air freight tonnage forecast to grow by 3.88% to reach 335,500 tonnes.
• 2012 rail freight tonnage forecast to increase by 2.78% to hit 6.15mn tonnes.
• 2012 total trade (real terms) forecast to rise 1.60%.

Pakistan Freight Transport Market Report 2012

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Key Industry Trends

PNSC To Purchase New Vessels The country’s national flag carrier, Pakistan National Shipping Corporation (PNSC), is set to purchase four new vessels over the next 12 months, according to the country’s federal minister for ports and shipping, senator Babar Ghauri, speaking to reporters in October 2011. The purchase plan follows the scrapping of two vessels by PNSC and will take its total fleet back up to 11 vessels, the minimum capacity pledged by the company’s previous chairman.

Pakistan Railways Secures PKR4bn Bailout Package

A PKR4bn (US$80mn) bailout package for state-owned rail company Pakistan Railways (PR) was announced in October 2011 by the Pakistan government. The package was approved by the Central Development Working Party (CDWP) on the condition that the rail operator focuses on freight operations that have been suspended due to weak performance for successive years. The package also involves the improvement of infrastructure and procurement of additional locomotives.

Union Strike Affects PIA’s Flight Operations Pakistani state carrier Pakistan International Airlines (PIA)’s cargo flight schedule was hampered over the weekend of July 16-17 2011, owing to industrial action by its workers’ union. The strike resulted in the postponement or cancellation of 44 flights from Karachi, comprising some 17 international flights and 27 domestic flights.

Key Risks To Outlook

In terms of political risk, the May 22-23 raid by Pakistani Taliban militants on the Pakistan Naval Station Mehran naval aviation base in Karachi demonstrates how even secure military facilities can no longer be considered safe. The attackers were defeated after a 17-hour clash with security forces, during which the militants were able to destroy two US-built P-3C Orion surveillance aircraft and kill 10 soldiers. The raid rekindled memories of a militant siege at the Pakistan Army General Head Quarters in Rawalpindi in October 2009. In addition, because PNS Mehran is only 24km away from Masroor air base, which is believed to store nuclear weapons, there are concerns that militants could attempt to seize warheads in a future raid.

The naval base raid will also be of concern to China, which is Pakistan’s most consistent ally. China had 11 aviation trainers stationed at PNS Mehran, and while none of them was hurt, Beijing will be apprehensive about the safety of its nationals in Pakistan. China’s interests in Pakistan are growing. On May 22 Pakistani defence minister Ahmad Mukhtar stated that China has agreed to take over control of the port of Gwadar, which is on the Arabian Sea and has been developed with Chinese financing from Singapore’s PSA. The previous week, Mukhtar had accompanied Prime Minister Yusuf Raza Gilani on a trip to China.

Gwadar is a major symbol of Sino-Pakistani cooperation. Pakistan somewhat optimistically hopes that the port will evolve into a major commercial hub, along the lines of Dubai, while China hopes to connect the port to its own territory by building a railway to landlocked western China. This would create a new transport corridor, bypassing the Indian Ocean and Malacca Straits, where Chinese naval planners fear potential maritime interdiction of their country’s trade.