It is the designation given to comprehensive, state-of-the-art facilities for storage/warehousing, clearance and other treatments required by import cargo after discharge from ship prior to leaving the port for inland destinations, re-export if cargo village is designed to play the role of a trade processing zone, and for export cargo prior to its loading into vessels.
This planned development needs to be evaluated in conjunction with the development plan of the KPT for deepening the navigable channel to 13.5 metres, facilitating transit of vessels drawing 12 metres, in the port. Accomplishment of these two developments would be a landmark for the KPT by becoming a regional multi-purpose commercial port.
In the year 2001-02, the KPT handled a total cargo volume of 26 million tons; 12 million tons of dry cargo and a container volume in excess of 715,000 TEUs (20 feet equivalent units). While greater depths in the channel would make it possible for bigger vessels, benefits and the impact of cargo village once in full operation can be far-reaching for the national economy in general and for our sea-borne trade in particular.
It can prove to be a catalyst in inducing greater flows of global trade through the Karachi Port from/to land-locked countries of Central Asia that may evolve following the geo-economic transformation stirring the region.
Nothing has so immutably changed the global transport scenario, since the first use of wood logs as means to move persons and goods on the water surface, as the container revolution. Kicking off in the mid-1960s in the USA, Western Europe and the Far East Asia, container as an art of packaging, an equipment of transportation and international logistics, has gradually asserted its relevance as the most vital element in the movement of global trade. The pent-up global demand, accumulated during years of the World War II, for consumer and capital goods, could be satisfied only through massive production, which called for fast and reliable transportation system at massive scale, to carry trade in raw materials and manufactured goods between countries. The compulsions of global trade, thus, provided the cause for container revolution. However this was not limited just to packing cargo; it required purpose-built ships to carry these boxes with requisite equipment aboard to load and unload boxes in the ports at the initial stage —the cellular, gearless, container vessels being the ultimate form, and necessary port infrastructure and back-up services. This restructuring of world shipping and port industry was highly capital-intensive, beyond the capacity of developing economies. The first run of containerization, through conversion of ships and existing berths and port hardware to the requirements of containerization occurred in the developed economies of North America, Western Europe and Japan, but was picked up by developing economies as well.
Dependent on the developed economies for their exports and imports, and being at the receiving end, developing countries had no option but to go containerized. Following the advice of Bohdan Nagorski, the Polish expert on port problems, these countries used their available ships after necessary additions or amendments for transporting containers and converted the existing berths by installing shore-to-ship gantry cranes to handle containers in the port.
Further growth in container business lead to construction of purpose-built cellular gearless container vessels and development of integrated container terminals, equipped with modern gantry cranes and back-up service facilities. This is the path Singapore, Hong Kong (the top two container ports of the world currently), Taiwan and South Korea have taken to attain their present status. This feature of their development has pre-eminently contributed to their emergence as Asian Tigers with aggressive export-orientation of their economies resulting in per capita income matching with some of the European countries.
In case of Pakistan, the saga of maritime sector’s quest to face challenges of container age is not very enviable. The first vessel with containers was berthed at the Karachi Port—the only port of Pakistan at that time as far back as December 1973. In its report on containerization in Pakistan, March 1982, the Japanese International Co-operation Agency (JICA) recommended the government an urgent plan to develop a 2-berth integrated container terminal at the KPT. In the meantime Port Qasim Authority) had developed its marginal wharf with seven berths, apart from purpose-built iron ore and coal berth to serve PakSteel—; the three of them with a total 600 metres length with 11 metres draft alongside and vast flush area behind the berths, offering a good option for developing a terminal through conversion of the existing hardware with marginal additional cost, to take care of the containerized trade of Pakistan.
The tussle between the two ports for container terminal was palpable, that prompted “containerization international” , the magazine on world container developments, to publish an article captioned “Two Admirals Battle”. In those days, the two ports were headed by two Admirals as chairmen. In 1997, the PQA had its integrated container terminal through conversion by private sector, followed by the Karachi International Container Terminal at the KPT in 1998. Had the KPT developed purpose-built container infrastructure early 1980s, it would have been a hub port, serving container feeder services to/from ports of the region and would have provided boost to industrialization in Pakistan through foreign investments. Against this back-ground development, “cargo village” is a welcome development and a pace-setter for maritime sector of Pakistan.
During the 1980-98, the world trade registered a 37 per cent growth, the bulk trade grew at an annual rate of 1.3 per cent; dry bulk at 1.9 per cent and the bulk liquid at 0.8 per cent, liner trade at 3.2 per cent; non-containerized general cargo at 0.6 per cent and container trade at 8.3 per cent, transcending as the most dynamic sector of global sea-borne trade. In 1980, the general cargo in its widest sense, represented an estimated 14.3 per cent of total sea-borne world trade by weight; containers constituted 20 per cent of this volume or 3 per cent of the total world trade by weight.
In 1998, despite tripling its market share, container trade was 9.1 per cent of the total world trade by weight. In terms of value container trade was 28 per cent in 1980 and 56 per cent in 1998 of the world trade value. Containerization, thus, emerged as the major dynamic sector not only of the world trade but also of the entire global industrial sector.
The process has greatly been facilitated by integrated container transport system, i.e. door-to-door movement which represents physical side of container revolution; it requires to be supported by institutional arrangements to satisfy the legal, fiscal and regulatory imperatives in the countries of origin, transit and destination. The later part has been catered for within the framework of multi-modalism. The door-to-door movement within the institutional streamlining, has created its own market. It has directly helped to integrate a number of countries within the mainstream of global economy.
What has contributed to the pre-eminence that containerization has assumed in the conduct of global trade, shipping and port industry? It is the speed, reliability, security, efficiency and the capacity of container, lending itself to door-to-door movement with cargo remaining intact. Optimal benefits to the trade and the economy are the safe transit, irrespective of various modes: air, sea, road, rail, inland, waterways etc. This is what, in nutshell, is implied under multi-modalism. An MTO can be a vessel-owning carrier as well as a non-vessel owning carrier. As transport user, is no longer to worry about making diverse arrangements with different modal operators and carriers along transport chain. The MTO is required to issue a document covering the transport of goods from a place in one country to a place in another. Acting as principal, he subcontracts all the services other than those agreed price and will support any price fluctuation and other expenses which might not have been originally envisaged.
In Pakistan, multi-modalism is in its infancy stage and the government has yet to enact the necessary legislation, and the forwarding industry has yet to restructure itself to match the advanced economies. Noneless, the “cargo village” at Karachi Port can prove to be a great magnet and a massive impetus to develop viable multi-modal operators in Pakistan. A number of shipping lines and leading freight forwarders are engaged in a sort of semi-multimodal logistics activity, but the absence of the necessary institutional framework has yet to be completed.
This calls for joint efforts of the government, the Pakistan Shippers Council, and the Pakistan International Freight Forwarders Council. It would be in the national interests to do the needful before the WTO regulations become operative in 2005.
The layout of the ~cargo village” would include container yards, reefer points, dangerous and general cargo sheds, silos, cold storage, processing plants, truck stands, office complexes, road and rail connections within the village and exit points. Its inter-linkage with Lyari Expressway and Northern By-pass would imply less port-induced traffic congestion for the city of Karachi and smoother and speedier passage for cargo originating from and destined to up-country. It can be one-stop-shopping mall for the trade and logistic sectors for full range of services to be available as required for the movement of diverse cargoes.
Incorporating economic zoning parameters in the development the village can add to its contribution to the national economy as well as the revenue of the KPT. This can be achieved by allowing free trade zone/export processing zone facilities within the village. Entree-port trade is a significant feature of a number of sea ports in the world, where goods are imported in bulk, stored in the zone, processed, refined and packed according to tastes and requirements of individual markets abroad and re-exported at appropriate time when the market sentiment is favourable.
Given the favourable geographic location in the region, the KPT can attract multinationals to use the village as distribution centre for their finished products and spare parts in the countries of the region, on the pattern of Dubai. With potential for adequate supply of skilled and qualified manpower and relatively favourable wage structure, there is a chance for the village to attract the FDI for container manufacturing, besides assembling the last stage in the production of market-ready consumers and capital goods of a wide range for sale both in domestic and foreign markets.