Modern, efficient & cost effective logistics system – Need of the day

Ah, how wonderful life has become.  Modern technology, online payment systems and e-commerce have made life very easy.  Waiting for the stores to open, driving down to the market during heavy traffic hours, hopping from shop to shop to find the best products at competitive prices may still be part of life for the slightly older generation but for the new generation it’s all online shopping.  When someone wants to buy something, they can go online anytime of the day, or night, and right away find the best and least expansive products in a few minutes, from the comfort of wherever they are.  These products may be sold by someone in the other corner of the world, but who cares?  Thanks to the modern, efficient and cost-effective logistics systems all around the world, the ordered products reach us in a few weeks or sometimes just in a few days.  And someone in that corner of the world made some money by selling products internationally.

And it is the part i.e. a modern, efficient and cost-effective logistics system” or more accurately “a modern, efficient and cost-effective international logistics system” is what we, Pakistanis, lack, or our micro, small and/or medium size manufacturers could also be making a lot of money by selling internationally.  The problem is not as visible in the domestic market where a bunch of smaller domestic courier companies, such as TCS, Trax, Leopards etc. are doing good work and filling the gap but shipping smaller goods internationally is a challenge.  Pakistan makes lots of products – good ones, cost effective, in demand, but these can’t be sold outside Pakistan as the moment shipping charges get added, the total price skyrockets and products become uncompetitive.  In other countries the state owned postal and logistics services are generally the first choice of small shippers being easily accessible and cost effective, not in Pakistan though.  Pakistan Post appears to be completely dysfunctional in this area.

To support its micro, small and/or medium size manufacturing sector and to enable them taking full advantage of ecommerce, and micro exports, Pakistan needs a state owned modern, reliable, efficient and cost-effective mail and logistics system.  In today’s interconnected world, e-commerce has emerged as a critical driver of economic growth, offering unprecedented opportunities for businesses and individuals alike. For Pakistan, a country with a burgeoning population and an increasing reliance on digital platforms, developing a modern and efficient postal and delivery system is vital to fully leverage the potential of e-commerce.  Wake up Pakistan Post. 

And there are tons of benefits.  Here’s how a robust postal infrastructure can benefit the nation.

• Enhancing Economic Growth

A reliable delivery network underpins the success of any e-commerce ecosystem. Pakistan’s e-commerce sector, which has grown exponentially in recent years, contributes significantly to the economy. According to a report by the State Bank of Pakistan, e-commerce transactions reached over PKR 100 billion in 2021, showcasing its potential as a key growth sector. An improved postal system can accelerate this growth by ensuring timely and cost-effective delivery, fostering consumer trust and encouraging more online shopping.

• Boosting SMEs and Startups

Small and medium-sized enterprises (SMEs) and startups form the backbone of Pakistan’s economy. Many of these businesses rely on e-commerce platforms to reach a wider audience. However, logistical challenges, such as unreliable delivery systems and high shipping costs, hinder their growth. A modernized postal service can provide affordable and reliable delivery solutions, enabling SMEs to scale their operations and compete in both domestic and international markets.

• Promoting Financial Inclusion

An efficient postal system can also contribute to financial inclusion, especially in rural and underserved areas. By integrating services like cash-on-delivery and mobile wallet payments into delivery networks, postal systems can cater to consumers without access to traditional banking services. This inclusivity can help bring millions of un-banked Pakistanis into the formal economy.

• Facilitating Cross-Border Trade

Pakistan has a strategic geographic location, offering the potential to become a regional trade hub. A well-developed postal system can facilitate cross-border e-commerce, allowing local businesses to tap into international markets. This would not only increase export revenues but also enhance Pakistan’s global competitiveness in sectors like textiles, handicrafts, and technology.

• Creating Employment Opportunities

The development of postal and logistics networks can generate thousands of direct and indirect jobs. From delivery drivers and warehouse workers to technology developers and customer service agents, the industry has the potential to create employment opportunities across a wide range of skill levels. This can play a significant role in addressing unemployment in Pakistan.

• Reducing Urban-Rural Disparities

Rural areas in Pakistan often lack access to the products and services available in urban centers. By improving last-mile delivery capabilities, a modern postal system can bridge this gap, ensuring equitable access to goods and services. This can also encourage rural entrepreneurs to participate in e-commerce, fostering inclusive economic growth.

• Strengthening Consumer Confidence

For e-commerce to thrive, consumer confidence is paramount. Timely and secure delivery of orders builds trust in online platforms, encouraging repeat purchases. A strong postal and delivery system can enhance this trust, driving higher e-commerce adoption rates and contributing to the sector’s long-term success.

• Supporting Digital Transformation

An efficient postal and delivery network is integral to Pakistan’s broader digital transformation goals. As the government and private sector invest in digital infrastructure, a modernized postal system can complement these efforts, enabling seamless integration of e-commerce, logistics, and digital payment systems.

What needs to be done?

To unlock the above benefits, Pakistan Post must focus on restructure and reorganizing by reactivating their physical network of locations, marketing their services that meet the needs of micro, small and medium size manufacturers’ shipping needs, training and energizing their staff and get back into the game.

Additionally, it must investigate:

• Public-Private Partnerships:  Collaborate with private logistics companies to modernize infrastructure and leverage technological innovations.
• Technology Integration:  Implement tracking systems, automated sorting facilities, and AI-powered logistics solutions to enhance efficiency.
• Investment in Last-Mile Delivery:  Focus on improving delivery services in remote and underserved areas.
• Regulatory Support:  Develop policies that support e-commerce growth, such as tax incentives for logistics companies and simplified customs procedures for cross-border trade.

Moral of the story:  A robust postal and delivery system is not just an enabler for e-commerce but a catalyst for broader economic and social development. By investing in this critical infrastructure, Pakistan can unlock the full potential of its e-commerce sector, drive economic growth, create jobs, and bridge the urban-rural divide. It is time for Pakistan to prioritize this strategic initiative to position itself as a competitive player in the global digital economy.

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Babar Saeed

bsaeed@yahoo.com

November 15, 2024