Jul 23, 2020, 1:57 PM
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Around 70 percent of Afghan transit trade carried through Iran: ADB

Islamabad, July 23, IRNA -- The Asian Development Bank (ADB) in a recent report said that around 70 percent of Afghan transit trade has been carried out through Iran due to lower costs, more attractive security deposit, and detention tariffs.

Local media on Thursday said that Corridor Performance Measurement and Monitoring (CPMM) Annual Report 2019, stated Pakistan is still facing a severe challenge in reducing structural barriers for road transport that keep costs high, says the Asian Development Bank (ADB).

It said Pakistan took robust actions to improve the environment for transit trade, yet still faced a severe challenge in reducing structural barriers for road transport that keep costs high.

The CPMM data reported Torkham and Chaman border-crossing points (BCPs) continue as two of the most time-consuming nodes monitored by the CPMM.

It further added although Afghanistan has traditionally relied on Pakistan as a gateway to international shipping routes, recent trends indicate that 70 percent of Afghan transit trade is now diverted through Iran.

This shift has been driven by lower costs from foreign ports and more attractive security deposit and detention tariffs for transit containers from shipping lines that operate at Iran's seaports.

Furthermore, diesel fuel in Iran ($0.06 per liter) is significantly less expensive than in Pakistan ($0.86 per liter), providing an additional edge in terms of cost competitiveness. In the absence of a formal agreement, shippers and carriers face uncertainty in transit procedures, it added.

The report further stated that the CPMM trade facilitation indicator (TFIs) reported longer average border-crossing time, although relatively unchanged average border-crossing cost.

Total average transport cost showed an improvement, but both measures of speeds showed that trucks did not move as fast compared to 2018. The average border-crossing time increased to 38.2 hours.

The time to cross Chaman was 60.1 hours, ranked as the most time-consuming BCP in 2019; Peshawar took 45.8 hours and ranked the third most time-consuming. These samples were estimated from commercial shipments carrying goods destined for Afghanistan as well as Central Asia.

Following the approval of its National Transport Policy in 2018, Pakistan embarked on a series of reforms and initiatives to address structural inefficiencies and impediments, to increase exports through lowering cost and lead time of transportation.

The Federal Bureau of Revenue (FBR) launched the national single window and authorized economic operator program, to help speed up border clearance. Notwithstanding efforts to reform, Pakistan continues to face severe challenges: for example, road transport moves 94 percent of total freight in the country, yet it remains the second most expensive mode of transport (after air).

The report recommended for implementation of the national single-window system and port community system (PCS) to reduce cargo dwell time in seaports.

It said better parking area design and queuing systems could improve efficiency and speed up border crossing.

Pakistan does not yet have a domestic regulation on the international carriage of goods on road, which is a fundamental condition to implement the Carriage of Goods by Road (CMR).

Greater adoption of freight on rail and inland waterways would reduce freight costs and boost low-unit value exports such as agricultural produce.

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