Faisalabad dry port deserted due to elevated taxes

Higher Taxes hurt Faisalabad Dry Port

The dry port in Faisalabad was considered to be a symbol of growing economy of the country. Once it was a hub of exporting but is now deserted because of a number of factors.

All cargo activities have gone on a back foot because of elevated provincial taxes and logistical issues. The traders have started to look for alternatives to save their business. Karachi port is mainly where the traffic is being diverted for all sorts of cargo movement and handling.

Who is to blame?

The traders and manufacturers say the provincial government is the culprit. The reason is the imposition of multiple taxes including shipment tax and road tax in addition to federal taxes and duties. The traders have criticized the government for putting this burden on them affecting their business.

Because of this situation, the traders are forced to look for other ways to keep their business running. They now send their cargo to Karachi port via road instead of using the dry port and railway services to avoid additional taxes. The exporters also complained about the absence of Cargo Services on the dry port.

Goods containers often remain stuck at the port for days due to this reason. To avoid delay of cargo and goods, the traders found it convenient to use road network for transporting the cargo to Karachi port. By using the highways, shipment costs a lot but it is the only way to deliver international orders in time.

Decline in number of import/export containers

During the years of growing economy, this dry port used to handle approximately 3200 export containers in a month. It was during the years 2006-07, but now the numbers have declined to 200 to 250 containers a month.

The story of import containers is no different. During the peak time of economic growth and development the number was more than 3000 containers a month. This number has also come down to just 150 to 200 import containers on monthly basis.

The decline is drastic and is causing huge loss each passing day. The resources of this port are not being fully utilized because the problems at hand are not being taken care of.

Positive steps

Faisalabad is the leading city in exports because of its textile industry. It is considered the back bone of Pakistan’s economy. Exporters would not go to Karachi if they were given enough relief and necessary services at the dry port present at their doorstep.

The dry port signed a Memorandum of Understanding (MoU) with DP World, in 2014, which is a multinational cargo services company to give pace to activities at the port. Although it was a positive initiative but this effort was not fruitful because this company offered higher cargo charges, even higher than cargo trains.

Dry port authorities are now working on making new MoU with other companies. (KICT) Karachi International Container Terminal, Qasim International Container Terminal (QICT) and DICT are under consideration for this purpose.