Cargo village plans for Karachi port
This called for restructuring of world shipping and port industry with accompanying impact on inland transport network, technology underlying cargo handling equipment aboard ship and in the ports as well as operating modes of international logistics.
And it meant massive investments in purpose-built cellular container ships, redesigning of berths and their layout in ports and high-tech equipment for handling of containers. In the run-up to this ultimate stage, adaptation of existing shipping and port hardware as interim measure to the challenges of containerization was adopted.
While the developed economies had the resources for conversion of general cargo ships and berths to serve containerization, in the first instance, and ultimately development of purpose-built ships and terminals at ports to avail the full range of benefits resulting from containerization, it was the developing world that was the helpless victim of the onslaught of this unprecedented technological advancement in the realm of international transportation, for being unable to finance this change.
Conventional ships and ports handling piece-meal general cargo were rendered obsolete for container transportation and handling of container vessels and containers on berths. Containerization became the fashion and the inescapable need of global trade and transport. This made international shipping and port industry a catch-up game for the third world economies viz-a-viz developed economies; the earlier the developing economies had their shipping fleet and ports restructured and recast as per the requirements, the better were their chances to share the rising benefits of the global trade.
Economies of South-east Asia furnish an apt example to this effect. Their export-led growth was substantially supported and promoted by the fact that in 1970s they had already gone ahead with measures and strategies to adjust shipping and ports to containerization.
Historically, Pakistan can be termed as a laggard in adapting its shipping and port sector to requirements of containerization. First container vessel was berthed at KPT (Karachi Port Trust) in December 1973, early 1982 a study by JICA (JAPAN), commissioned by Pakistan on containerization in Pakistan, recommended development of a modern, purpose-built integrated container terminal at KPT to enable the sea-borne trade and to enjoy the benefits of containerization.
It was in 1998 that KPT had its first state-of-the-art container terminal, i.e. KICT, in operation, developed through conversion of the existing general cargo berths by the private sector. It was followed by PICT. Both the terminals were developed and are operated and managed by private sector. This is a big stride by KPT in the catch-up game to stay in the mainstream of global port industry as a successful regional port. The other big stride, along with reforms introduced by KPT over the years to improve its levels of performance and efficiency, is the development of ‘cargo village’ (CV) at the KPT.
The CV as recommended by consultants, will be developed in the western backwaters area of the Karachi Port. In its starting phase CV would cover an area of 350 acres that would be extendable to 1250 acres in its final phase. The initial cost of the project is estimated at $250 million. It will be a public-private partnership project where public sector is envisaged to contribute the basic infrastructure while private sector would develop other facilities and structures as per the requirements of the market.
The CV would be connected by rail-road corridors with the harbour complex for the movement of goods in bond between berths and the CV. Its connectivity to the inland transport network would be via Wazir Mansion railways station for transportation by railways and with Northern By-pass and Lyari Expressway for road movement of the cargo.
The basic approach to the development of CV, as an off-terminal core port facility, is that all activities constituting support services related to transfer of cargo between marine and land modes of transport —- beyond the direct ones —- are transferred to a centralized location within an operationally and economically feasible distance from berths.
Direct activities relate to loading and unloading of vessels at the berth, temporary storage of goods unloaded from inland transport for loading unto vessel as well as goods unloaded from the vessel for loading into inland transport vehicles, and the loading and discharging of inland transport ,i.e. railways wagons, trucks etc.
These activities generally need to be located on berths as interface between the sea and land modes of transport. Support services are designed to facilitate direct movement of goods. They may include, short and long term storage and bonded warehousing facilities and operations, cargo consolidation and de-consolidation and distribution services, cargo packaging and specialized handling services, customs processing and clearance, documentation and diverse commercial services (banking, insurance, role of shipping companies, freight forwarding etc.).
Besides, repair and maintenance service facilities for cargo handling equipment and transport vehicles and, very important in the global transport and logistics scenario, value-added services that take the form of customized packaging, labelling, assembly of parts into ready-to-use kits, free-trade /processing/ export/ entre-pot trade zones etc. It will be a basic function of the CV to consolidate these and other similar services and facilities at one location, providing “ one-window-operation ” to the trade, adding substantially to the value-chain of international transport through KPT.
Contribution of CV to KPT and the economy can be manifold. An aerial view of the areas around/and outside the port operational zone, would show them littered with massive number of empty containers; the right place would be a yard in CV.
It promises to be a strategic asset for KPT to cater for future developments in maritime transport, storage and warehousing facilities related to national as well as regional transit trade of Central Asian Republics as well as Western China.
Presently, in the absence of commercial bonded-warehousing facilities within the port operational area, a large number of public-bonded warehouses in the private sector have come up all over the city, in majority of cases in congested areas of the city, posing access/exit problems for road transport. CV could offer better location for them. Bulk of the possible activities in CV would be container-trade-based.
Containerization is at the core of multi-modalism that is currently the predominant operating model in global logistics. CV can be a central location for freight forwarding industry to organize multi-modal transportation of our trade, along with container yards and container freight stations for consolidation and de-consolidation of cargo, with storage and warehousing facilities in all variations.
Multi-nationals/ international trading houses can establish distribution centres where they import the products of their different plants in different countries, store them in the CV, and consolidate demand of customers in different countries and pack the containers for export. Processing zones and entre-pot trade centres can be located at CV to substantially raise value-addition contribution of KPT to the national economy.
In case of processing zone, parts can be imported, assembled with or without indigenous material input, and manpower contribution into ready-to-use kits or finished products for purpose of re-export. Automotive and electronics sectors of global economy are making use of this service as a new product where in certain situations logistics operator is assigned the assembly activity.
Under entre-pot trade regime goods are imported in bulk, stored in bond in the port area, and re-exported to countries offering higher market prices than the purchase price. Hong Kong, Singapore, Hamburg etc. greatly owe their development as prosperous port cities to this facility in their ports.