ISLAMABAD, Dec 13: Pakistan is facing high freight costs for exporting goods to the markets of developed countries, particularly to the United States, which resulted in decreasing the competitive edge over the goods coming from other countries.
Officials told Dawn on Monday that to cope with the intense competition in the quota-free WTO regime, exporting countries are making hectic preparations to increase their market share.
Besides making efforts in gaining market access through reduced tariffs and building strategic alliances, they are also actively working on greater trade facilitation and reduction of transportation costs.
Quoting a recent study on "Structural adjustment in textile and clothing in the post-agreement on textile and clothing (ATC) trading environment by Denis Audet", the officials said freight costs from Pakistan to the US were the highest in the world.
Citing an example, they said whereas freight costs by air are 9.7 per cent from the Philippines, 13.4 per cent from Sri Lanka and 14.4 per cent from India, such costs are 24.8 per cent in case of Pakistan.
Similarly, for transportation by sea average costs are three to four per cent, whereas from Pakistan they are 6.4 per cent. Thus overall costs, which average about eight per cent from Pakistan, are the highest in the world.
"If we are to successfully compete in the post-quota period, we should make every effort to reduce the freight costs. Under the aegis of the ministry of commerce, an excellent study on this subject was done by some international consultants a few years ago," they said.
In that study, the consultants suggested concrete measures as to how internal freight costs could be reduced. "But the government has yet to consider those suggestions."
Similarly, the officials said the government needed to expedite ongoing work on trade facilitation. "In the past, most of our efforts on trade facilitation were on the import side. While that also facilitated our exports, nevertheless we need to give due attention to exports."
In most competing countries, spot checks on exports are made at warehouses. On the other hand, in Pakistan most of the checking and documentation was still being done at the ports, which causes considerable delays.
Another serious problem in the past was the involvement of too many checking and counter-checking agencies at the ports. "This involvement needs to be periodically monitored and kept to a bare minimum," they remarked.
