International Business Analysis

The Threat of Global Gridlock

Submitted To:
Sir Ali Kamal

Submitted By:
Adil Nouman

MAB-4 ( C )
 The Threat of Global Gridlock

As supply and distribution chains have become longer and more complex, companies have begun to
realize that increased logistics costs can reduce or even eliminate the benefits of manufacturing where
labor is cheap. The congestion and bottlenecks of a transportation system strained beyond capacity
compound the problem, making supply chains seem even longer and more unpredictable. High fuel
prices are not the only issue here. It’s also the other costs of congestion: higher cost of inventory for
goods that are locked up longer in transit; the costs of uncertain, more variable transport times; and
the inability to react to changes in consumer demand.

Situation in Pakistan is not much different from international situation but it is bad because of totally
different reasons. Whole world is taking pressure because of lack of resources or costly resources but
in Pakistan nobody is even trying to use existing resources. Only some corporate bodies are big
beneficiaries. No measures regarding the development of local entrepreneur had been taken because
of which manufacturing industry is facing its worst in the history of the country. No industries, no
manufacturing, and no ways of mass industrial transportation. Ways of trade that are used by
Pakistani business sector are as below:

By Truck:
In Pakistan, road transport means have almost the monopoly on manufactured goods forwarding: the
road accounts of more than 80% of goods transport. Almost from the start of Pakistan’s industrial
development, most of the industry was dependent on roadways transportation and there is no change
in this trend yet. In this concern Pakistani government starts Motorway but that was the project
undertaken before time because load of traffic at that time and today, is not suitable for Motorway.
There are some benefits in this way of transportation and also have some draw backs. For example,
high flexibility in terms of transport jobs and changed plans, Fewer idles and waiting periods, and
relatively low transport times for short and medium distances. The disadvantages are Limited
transport volume, Traffic jams, Legal restrictions, Weather effects, Restrictions on transport of
hazardous goods. 

By Train:
If we talk about use of Railways in Pakistan for local and international we conclude a result there is no
use of Railways by Pakistani government or even by corporate body. Usually supply of oil is made by
Pakistan Railways and also used by Unilever Pakistan for Transportation of their goods across Pakistan
other than that Pakistan Railway is not a profitable organization.
By Ship:
Currently Pakistani shipping industries rely on 4 ports:

1. Bin Qasim Port

2. Karachi Port Trust
3. Gawadar Port
4. Port of Pasni

The mercantile scenario of Pakistan has faced difficulties in the past. The shipping industry in the
private sector had a setback in 1974 due to nationalization. Thus a healthy competition in shipping
between public and private sector ended. The traditional ship owners disappeared from the scene.
Now the Government has introduced a Policy to boost private investment in the shipping sector by
giving a host of incentives. PNSC is currently acquiring 5% share in trade. Pakistan National Shiping
Corporation is very weak organization as compared to international private sector.

Services
5%

PNSC
Foreign Carrier

95%

By Air:
There are currently 139 airfields in Pakistan and only one of them is only run by business community
which is Sialkot International Airport run by the Sialkot Chamber of Commerce & Industry.
.Pakistani cargo Jets are usually used by Pakistan army in terms of transportation of goods. They are
also used by local industry but not to that extent.