Emerging trends in logistics Management GBEL 555

Submitted to Sir Khurram Hidayatullah

Submitted on 25/06/2022

Muhammad Hammad Alam BS64 8004

Qasim Hamid Memon BS64 7945
Muhammad Shahzar Sani BS64 8028
Syed Shahmeer Ahmed BS64 8009
Maira Hanif BS70 9202

Sea Hawk shipping line PVT LTD

Sam Logistics PVT LTD
Atarri Shipping International

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ACKNOWLEDGEMENT

We would like to thank MR. Muhammad Siddique Atarri, CEO of Atarri international shipping,
MR. Syed Hassan Raza, Business Development Manager for Sea Hawk shipping line PVT LTD
and MR. Hisham Ahmed, the office manager for Sam logistics PVT LTD for helping us with this
report by giving the interviews and telling us how these companies operate. We would also like
to thank our instructor, Sir Khurram Hidayatullah to give us the opportunity to explore this sector
and get a better understanding of the industry of Pakistan.

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EXECUTIVE SUMMARY

A country’s economy heavily relies on the country’s logistical plan. With little to none plan as
such, this report was made to understand how the local logistics company in Pakistan are
operating and what challenges they face and how they counter them.

The worldwide logistics are evolving, with automation, technological advancements, new
policies, and tariffs making the process quicker and more efficient. While there are new
emerging trends in logistics throughout the world, the backbone of the Pakistani logistics
industry still relies on manual labor. This report focuses on key links who operate and control the
cargo.

The report gives an insight to change Freight forwarder, 3PL and 4PL, Consolidators and
NVOCC. It differentiates the change in their trends and how they are adapting to it, it focuses on
limitations that are faced by them and how they plan against it to stay in business.

Representative of three companies were interviewed to get a better understanding on how they
operate and manage thing, how they adapt to the changes and change their policies to still make a
profit.

It was discovered that while the company still makes a profit, the recent policies and government
incompetence is affecting industry greatly. With no reliability on the country’s economic
situation, the currency rate difference is a major factor that stresses the entire logistical process.

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Contents
ACKNOWLEDGEMENT........................................................................................................................2
EXECUTIVE SUMMARY.......................................................................................................................3
LIST OF FIGURES...................................................................................................................................5
QUESTIONNAIRE...................................................................................................................................6
ANSWERS.................................................................................................................................................7
COMPANY PROFILES.........................................................................................................................10
Company One:.....................................................................................................................................10
Company Three:..................................................................................................................................13
FREIGHT FORWARDER.....................................................................................................................15
3PL/4PL...................................................................................................................................................16
3PL........................................................................................................................................................16
4PL........................................................................................................................................................16
CONSOLIDATORS................................................................................................................................17
NVOCC....................................................................................................................................................17
KEY FINDINGS......................................................................................................................................18
Operations............................................................................................................................................18
Limitations...........................................................................................................................................19
Recommendations................................................................................................................................20

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LIST OF FIGURES

FIG.1- Evidence 10

FIG.2- Example, bill of lading 11

FIG.3- Evidence 12

FIG.4- Evidence 13

FIG.5- Example, Membership certificate 14

FIG.6- Chart, Freight forwarder 15

FIG.7- Chart, 3PL/4PL 17

FIG.8- Chart, Consolidator 18

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QUESTIONNAIRE
Company Name: _______________________________________________

1. Is you company Multinational or national?

2. How many branches or office you have globally?

3. What services you are providing?

4. What are your key achievements in Pakistan?

5. What is your turnover rate?

6. What kind of tracking system /logistics tool do you use?

7. Does your company follow applicable environmental laws and regulations?

8. Do you have an export control system in place also covering trade restrictions?

9. Do you routinely use third non-disclosure agreements (NDA's) to protect third party
intellectual property rights?

10. Do you require your suppliers to follow labor/employment and business ethics laws and
regulations?

11. How extensive is your network?

12. Are you licensed and bonded?

13. Is your company taking steps to improve the logistics?

14. How often is logistics reviewed critically at your company?

15. What does your company use for quality metrices in logistics?

16. According to you what effects can 3PL have on your logistics plan?

17. What should be the main logistics activity that a 3PL/4PL should improve?

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 18. what are your key areas of improvement and adoption of new trends?

ANSWERS

ATTARI SHIPPING INTERNATIONAL

Single Branch

Licensed and bonded

Services:

Import, export FTL LTL

Biggest order:

60 containers per week

Can provide international clearance & logistics

Laws & factors affecting performance:

Remittance law, bankers are not adequate/professional enough to handle remittances.

Current govt situation affecting the performance and flow, sudden ban costing them CRO
cancellation fees.

Network: all over the world, mainly linked China and South Korea

Credit time: 1 month credit to customers and suppliers. Advance payment for new customers

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SAM LOGISTICS (PVT) LTD.

Operates worldwide + foreign contacts.

Covers all logistic operations

Have agents abroad (USA)

One window solution

1 office - I.I. Chundrigar road

Problems company face:

No local cargo ships or shipping line

Low availability of cargo space

Current economy situation and bans disrupt the process.

Custom house approval required for danger goods

Why to choose them:

- customer service

- Cheap rates

- smooth operations

7-year-old company

2001 - best performance year (500 containers approx.)

Network active memberships which provide security and proofing

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SEA HAWK SHIPPING LINE. PVT. LTD

Offices:

5 nationwide offices

worldwide connection through sub-agents

Worked on:

CPEC BAHRIA TOWN GWADAR PORT

More than 50% turnover

Online tracking - FBR verified

Cold storage & own warehouses

Low prices to attract price conscious customers

Problems they face:

Tax changes, policies reversing, NRO issuances, high taxes, varying currency rate.

1 month est shipping time

Licensed - worldwide memberships

Factors which need improvement in country:

Cargo rail facility

Efficient local cargo operations

Level of export

Number of warehouses

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COMPANY PROFILES

For this report, three interviews were conducted with three different companies that operate on
different levels. The interview was conducted in this manner to understand if the size and spread
of the company affects the common trait amongst them, Logistics, and if it does, then how and
what causes it.

Company One:
Attari Shipping International:

Located in Jilani tower, Karachi, the company works as a freight forwarder only. With a capacity
of 60 FCL per week, the company knows its way around the industry. The company operates in
both, National and international space. The company has clearing facility in Turkey, United
States and Germany. The company is registered with PIFFA (Pakistan International Freight
Forwarders Association) since 2015, and according to it, they have an associate status.

Fig.1

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Fig.2

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Company Two:
Sea Hawk Shipping line. PVT. Ltd:

Sea Hawk Group was established in Year 1999 in Pakistan and Year 2006 in Dubai with the
objective of providing a full range of consolidation / deconsolidation services in Pakistan and
Dubai. With a committed team of highly experienced and dedicated freight and logistics
management professionals, Sea Hawk Group has considerable achieved its mission through
remarkable growth in a very short span of time. The company is an NVOCC / Consolidation and
Logistics distribution operator (3PL/4PL).

Their services include:

1. Project Cargo
2. Consolidation
3. Custom Brokerage
4. Warehousing & Distribution
5. Air Freight
6. Sea Freight Inbound
7. Sea Freight Outbound

Fig.3

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Company Three:

Sam Logistics (PVT) Ltd.

They have years of experience of logistics. Having huge network around the globe, they work
exactly according to your freight forwarding needs. They develop the best comfort level with
their clients providing them best customer support. They constantly strive to work to serve their
clients in the most efficient way. They simplify the work methods and make it more reliable for
you, as client satisfaction is their priority. They Understand Client`s Variable needs regarding
Logistics and provide them services accordingly.

Their services include:

1. Ocean freight
2. Air freight
3. Warehousing
4. Custom Clearance

Fig.4

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Membership certificate example

Fig.5

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FREIGHT FORWARDER

Freight forwarders act as an intermediary between the company who makes the shipment and the
destination for the goods. Although they do not carry out the shipments themselves, they offer
different transport modes such as sea/ocean freight, rail freight, road transport and air freight
shipment. A freight forwarder is responsible for transporting goods from one destination to
another. A freight forwarding company will normally arrange the entire shipping process for
their clients – from the storage of goods in a warehouse to shipping their merchandise
internationally.

Fig.6

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3PL/4PL

3PL
In a 3PL model, an enterprise maintains management oversight, but outsources operations of
transportation and logistics to a provider who may subcontract out some or all of the execution.
Additional services may be performed such as crating, boxing and packaging to add value to the
supply chain. In our farm-to-grocery store example, a 3PL may be responsible for packing the
eggs in cartons in addition to moving the eggs from the farm to the grocery store.

4PL
In a 4PL model, an enterprise outsources management of logistics activities as well as the
execution across the supply chain. The 4PL provider typically offers more strategic insight and
management over the enterprise's supply chain. A manufacturer will use a 4PL to essentially
outsource its entire logistics operations. In this case, the 4PL may manage the communication
with the farmer to produce more eggs as the grocery store's inventory decreases.

Fig.7

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CONSOLIDATORS

Freight consolidation is when a shipper combines multiple shipments within a region into a
single load hauled by a carrier to a destination region. The load gets broken down into smaller
parts and delivered by a regional carrier to their many destinations.

Fig.8

NVOCC

An NVOCC is as ocean carrier who performs all the services of a carrier, but who does not own
their own vessel(s). They operate by leasing or buying available space in containers and using
their own House Bill of Lading to contract with customers.

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KEY FINDINGS

Operations

Once the interviews were taken, we found out that the logistics service provider in Pakistan all
operate in the same way. They all have same procedures, and some even use the same brokerage
house etc. It was discovered that all logistics companies in Pakistan work in unity, but some have
a slight edge due to their size.

Atarri international shipping, the smallest company we interviewed, has a network of its own,
which is mainly situated in China and south Korea. They mainly operate as freight forwarder and
are licensed and bonded. Their main services are Import and Export (FTL, LTL) and can even
provide international clearance and logistics. While the company representative didn’t feel
comfortable in sharing their yearly turnover, we were told that the company is profitable by a
good margin and generates enough revenue. To retain its customers, Attari offers a one-month
credit to old customers and suppliers.

Sam logistics on the other hand, is a well-established logistics company which can also offer 3PL
to its clients. They are a one stop window company with agents in USA as well. They cover all
logistics operations, and attract new customers by offering good customer service, cheap rates,
and smooth operations. The company’s best performance year was 2011, where it exported 500
containers. Sam logistics has a network if active members and provides security and proofs for
everything, which attracts new clients and retains the current ones.

Sea Hawk, being the largest company, we interviewed, still had the same point of view as the
other two countries which proves that the company spread isn’t as important as policies. The
company has 5 nationwide offices and is connected worldwide via its sub-agents. They have
worked for huge local projects such as CPEC, Bahria town & Gwadar port. With a 43% gross
profit margin, the company is well settled. They even have FBR verified online tracking and
their own cold storages and warehouses.

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Limitations

After further discussing the situation with the representatives, they shared their limitations and
how they face them. Above all this, they also told us how the logistical side of Pakistan can be
made better. The lack of education is the major reason why the companies cannot work at their
full potential. The banking staff knows nothing about the logistics, they aren’t professional
enough to handle the shipping clients. They cause delay by 1) not telling all what’s needed at
once, 2) they aren’t aware and have to consult their managers for every small detail. The
payments that come in the form are remittance are affected by harsh laws that enforces a big
amount of tax on the income. The current government situation affects the flow, performance,
and efficiency. The sudden ban on import items has caused some of the companies a million
rupees in CRO fees, the million which most companies cannot afford to pay on a short notice.
For example, Attari international had to pay a fine of 800,000 rupees when a container which
belonged to Jakarta, was in customs when the government imposed an import ban.

The Tax changes, policy revising, NRO issuances, high taxes and instable economy and currency
rate don’t help the company either. Pakistan regulation changing taxes, new SRO, and a weaker
import also means that the imports (when unbanned) varied a lot. For example, Duty on a car can
vary from 300% to 450%, and they can do nothing about it because it’s not in their control. This
causes loss as the sometimes the imported item is beyond the buyer’s budget and the profit must
be compromised. The instable currency rate also plays a huge factor in this, as often a booking
for something is made at 200 rupees per dollar, but when the item arrives, the rate is 220 per
dollar. These limitations are mainly face on an international level though.

Locally also, Pakistan struggles to maintain a good standard for its logistics companies. There
aren’t any local cargo ships or shipping line, most companies are NCOVV. There is low cargo
space, and the current economy further disrupts the process. Running back and forth for custom
house approval also makes the process difficult as things never happen according to plan in one
go.

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Recommendations

To improve the overall Pakistan export levels, all three companies gave us the similar answer. A
good, well-maintained cargo fail facility. A cargo train facility with efficient local cargo
operations, as well as government-maintained warehouses. The system needs cleaning as well
most operations and procedures cannot be completed without offering a bribe.

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