As the CPEC began operating, the need for storage and warehouse space has grown steadily. Industrial routes connected to the CPEC are calling for additional storage and warehouse space, but the requirement for cold chain logistics is growing most quickly. Building a unique cargo village will aid in facilitating good cargo inflow across the central Asian states, and Pakistan could act as a significant transportation hub in the area.

Pakistan’s road to development through CPEC

The China-Pakistan Economic Corridor (CPEC), which aims to finance Pakistan’s road and energy development through a combination of loan and finance totaling approximately US$62 billion, was set up by the Chinese government. It plans to devote 11. billion US dollars, or 17.7 percent of the overall CPEC investments, to the expansion of Pakistan’s transportation and logistics networks. As a result, China will be able to strengthen its connections with Central and South Asia in terms of trade and transportation, and the nation’s constantly burgeoning logistics and transportation industry will also be given a boost.

The expansion of industry patterns:

The expansion of the industry patterns are such that between 1991 and 2016, it outpaced the GDP’s yearly growth rate. As the CPEC initiatives are finished, it will increase its contribution of the GDP by 2.5 % points, from 13.3% in 2016–2017 to 14.3% in 2017–2018. With CPEC, the number of formal jobs created by the sector would increase to around 3.6 million from the present 3 million.

Increment in sales products via CPEC

According to CPEC, $6,100 million might involve spent in road transport, compared to $3,690 million in rail transit. Investment in the road sector by CPEC will increase the flow of trade products because 96% of the nation’s freight movement is transported by roads.

With a median yearly increase of 18.8% over the last five years, trade among both nations has increased and is expected to keep on increasing as CPEC develops.

Relevant: Why Pakistan’s Exporters Need to Embrace Sustainability

The transport capacity of the corridor:

To boost the road densities and transport capacity of the corridor, CPEC proposes to convert low-type  highways to high-type roads in accordance with the substantial investment priority given to the road network. The national highway network has a total length of 260,000 km, of which 68.4% are high-type roads, although the remaining routes are only gradually being upgraded.The low-typed road distribution has a road length of 0.33 km per square kilometre of land. 

The CPEC investment will work to increase the number of low-type roads, while also constructing and improving highways and motorways. The trip time will be cut in half, and the cost of transportation will go down by 10%.

Special Economic Zones (SEZs) and Impact on logistics buisness

You must pay close attention to how the Special Economic Zones (SEZs) and Industrial Parks of CPEC are successfully integrated with the transportation network, which is made up of ports, rails, roads, and airports, around the important nodal cities of Gilgit, Peshawar, Dera Ismail Khan, Islamabad, Lahore, Multan, Quetta, Sukkur, Hyderabad, Karachi, and Gwadar. The integration of significant industrial districts with an improved road network will result in increased inter-provincial speed connectivity and cheaper transportation costs. Since it will lower the cost of its services and hence increase their efficiency, it will act as the main driver for the logistics sector’s growth.

Expansion in Freight shipping and Enhancements to Freight Mobility

The expansion in freight shipping and enhancements to freight mobility are correlated with the connectivity of industrial zones with roadways. Considering the accessibility of capital among owners, it might change the concept of car ownership. Currently, one vehicle ownership model is used for both large vehicles and light trucks. While the ownership models for other huge pickups and minor pickups are 1 and 2, correspondingly Due to a shortage of funding, eighty percent of operators do not plan to increase the size of their fleet. If the availability or provision of capital is secured, an increase in vehicle-ownership ratio will be seen given the rise in demand for goods transportation.

Pakistan may also experience a surge of private and foreign investment as the country lacks public investment in the transport sector. Only 25-30% of Public Sector Development Programme (PSDP) fund is spent on annual transport budget, which is not sufficient.

The expansion of global infrastructure as part of China’s OBOR project

Pakistan in light of In terms of road growth in specific, and transportation expansion in general, CPEC is currently going through an evolution phase. The CPEC initiative works in tandem with the expansion of global infrastructure as part of China’s larger One Belt, One Road strategy. As a result, the conceptualization of the CPEC architecture should not be restricted to a national context. It must be considered as the international transport system that has more significant geo-economic and geo-strategic ramifications for Pakistan on both local and international scales. It is crucial for the country’s logistics and shipping industry’s domestic expansion, but that only happens when the industry is organically connected and streamlined around official procedures.

Addressing the gap:

With an emphasis on directing capital-raising investments in micro, small, and mid-sized enterprises (MSMEs), Karandaaz Pakistan additionally uses funding for fleet funding, amid the potential of road transportation as a consequence of the China Pakistan Economic Cor in Pakistan. This is in keeping with the intention of formalising the business community and addressing the gap among the obtainable PSDP as well as the potential for investment of the sector.

The particulars:

  • The development of the industrial categories was so rapid from 1991 – 2016 that it outperformed the GDP’s annual growth rate.
  •  Assuming an upsurge popularity for transporting goods, a rise in vehicle-ownership proportion will be observed if the accessibility or allocation of funding is ensured.
  • Considering a spike popularity for logistics services, an upsurge in vehicle-ownership proportion will be observed if a supply or provision for financing is ensured.

Thus, there is no doubt in saying that CPEC’s role in improving Pakistan’s logistics business is huge.