Urgent trucking policy reforms could unlock $15 billion trade market

Pakistan requires an urgent implementation of the National Trucking Policy to improve road logistics, as accidents cost the country nearly $12.5 billion annually, according to the World Bank.

Proper policy enforcement could also facilitate Pakistan’s access to the $15 billion regional transit trade market, particularly en route to Central Asian countries.

The Pakistan Business Council https://www.pbc.org.pk/ has prepared a report titled Pakistan Road Logistics Sector: Challenges, Opportunities, and Policy Response.

The report highlights that the 2007 National Trucking Policy, revised in 2020, remains pending Cabinet approval. Swift approval and implementation would facilitate sector formalization, improving operators' access to institutional financing and investment.

Policy enforcement would also encourage Euro-5 compliance and cross-border partnerships for left-hand drive trucks—both essential for international freight competitiveness. A more attractive investment climate could further draw foreign entities interested in local assembly or fleet expansion.

Road Safety & Infrastructure Reform

The harmonization of road safety standards through a unified Road Safety Act is crucial. This act would replace the outdated 1965 Provincial Motor Vehicle Ordinance, ensuring standardized safety regulations, vehicle age limits, and compliance requirements across provinces.

Standardized axle weight limits could mitigate road degradation and reduce accident risks, significantly lowering infrastructure maintenance costs. However, enforcement remains ineffective, with 40% of four- to six-axle trucks and 30% of two- to three-axle trucks routinely operating above legal weight limits. This overloading leads to premature infrastructure failure and is a leading cause of fatalities in accidents involving heavy commercial vehicles.

Trade & Transit Challenges

Pakistan’s logistics sector is dominated by road transport, spanning 501,169 km, compared to 7,791 km of railway. However, procedural inefficiencies within customs and border authorities create a 48% performance gap. Lengthy clearance times and inconsistent enforcement of freight movement regulations discourage international logistics firms from engaging in regional trade.

Pakistan also faces severe deficiencies in warehousing and cold-storage facilities, leading to significant losses—particularly in perishable goods, with over 40% lost due to inadequate storage options. The lack of cold storage at airports and railway stations further limits efficient handling of temperature-sensitive goods.

Road transport remains the costliest mode of freight movement, inflating supply chain expenses. Traffic assessments predict a 40% increase in road traffic over the next decade, leading to higher fuel consumption and greenhouse gas (GHG) emissions.

While policymakers have focused on improving road infrastructure—especially under China-Pakistan Economic Corridor (CPEC) and Central Asia Regional Economic Cooperation (CAREC)—public transportation and industrial policies have received minimal investment. Despite highway and motorway improvements, traffic congestion continues to rise.

Declining Logistics Competitiveness

Pakistan’s Export Logistics Performance Index scores 2.3 out of 5, indicating 54% underperformance compared to regional benchmarks. The country’s Logistics Performance Index (LPI) has declined from 2.42 in 2018 to 2.3, reflecting inefficiencies in sustainable logistics, supply chain management, transportation efficiency, and freight costs.

Without urgent policy intervention, Pakistan’s road logistics sector will remain informal, poorly regulated, and under-invested, restricting its potential to support national and export competitiveness. Fleet operators who adhere to regulations—such as axle load limits and licensing—face higher costs, while informal operators, backed by politically influential industries, continue to operate unregulated, distorting the market and preventing sustainable growth.