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June 18, 2019

Decision to reduce cargo weights on trucks slammed

Business

June 18, 2019

KARACHI: Shipping agents on Monday slammed the government’s decision to force reduction of cargo weights on trucks, saying the measure would lead to increase in cost of transportation and traffic congestions.

Pakistan Ship’s Agents Association (PSSA) said the implementation of the new axle load regime would do more damage than good under the current situation and result in around 80 percent increase in the transportation costs.

The government planned to introduce axle load management regime to control overloading of public service vehicles. Tariq Haleem, chairman of Pakistan Ship’s Agents Association said the initiative has already started to cause congestion at the ports and the city is suffering from heavy traffic during the daytime on the roads since the same volume of cargo/goods now need about 180 trucks instead of 100.

“As a result of this initiative shortage of transport has already started with increase in freight rates whereas currently the Pakistan Railways is not equipped to handle the extra volume due to limited wagons and engines,” Haleem said.

“Shortage of trucks combined with 100 percent increase in withholding tax on truck freight and imminent increase in diesel prices due to the depreciating rupee will further increase the transportation rates and it can be estimated that overall the transportation cost can increase by 80-100 percent.”

PSSA’s chairman said the economy is struggling and with the depreciating rupee value against the dollar the cost of doing business is already going up. “With the implementation of this load policy the cost of doing business will further increase as there is already a shortage of transport in the country and transit loss due to multiple handling of cargoes in most cases”.

Haleem said the cost escalation would affect exports as well as contribute to higher inflation as it affects the overall supplies ranging from raw materials to finished goods. “The additional diesel consumption will also increase fuel imports and will result in unnecessary strain on our import bill and increase trade deficit,” he said.

“Reputable business houses are predicting approximate loss of Rs500 billion plus annually to the economy due to this impulse restriction on axle load.” PSSA urged the Prime Minister Imran khan to intervene urgently and instruct the concerned ministry to stop making hasty unplanned decisions, which are resulting in negative impact.

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