Daily Times

Pakistan’s logistics industry stands at a critical crossroads, grappling with significant challenges that impede its growth and efficiency. Despite hosting between 2,000 to 3,000 registered logistics companies, the sector remains trapped in traditional practices. This results in low profit margins and inadequate infrastructure that fail to meet the demands of an increasingly digital and interconnected world.

The economic significance of this sector cannot be overstated. Contributing approximately 10.7% to the national GDP and employing over 5.8% of the labor force, the logistics industry is a crucial economic pillar. The Pakistan Economic Survey 2023-24 reveals that the transport and communication sector accounts for 20.51% of the national GDP, comprising 23% of the services sector. However, Pakistan’s global standing tells a different story. Ranking 113th out of 160 countries in the World Bank’s 2023 Logistics Performance Index (LPI), the country faces critical deficiencies in trade facilitation and supply chain efficiency.

Several fundamental issues plague the sector’s development. Infrastructure bottlenecks, including poor road conditions and inadequate warehousing facilities, significantly hinder logistical operations. Furthermore, bureaucratic inefficiencies and regulatory red tape create delays and increase costs for businesses. The lack of modern technology adoption among many logistics companies further stalls progress, leading to inefficiencies in tracking and managing shipments.

The challenges extend beyond physical infrastructure. Pakistan’s internet infrastructure has faced significant setbacks. In 2023 and 2024, multiple submarine cable faults resulted in substantial data shortfalls and widespread disruptions. These outages have caused severe financial losses for the IT sector, with estimates suggesting that a single hour of disruption can result in losses exceeding $1 million. The instability of digital infrastructure poses a significant barrier to modernization efforts.

Digital literacy and technology adoption present additional hurdles, particularly in secondary cities. Many businesses struggle with limited technical expertise, while high implementation costs deter small enterprises from making the transition. The e-commerce landscape further amplifies these challenges. With revenues reaching $5.2 billion in 2023 and projected to grow to $6.711 billion by 2029, the industry is experiencing rapid expansion. Yet, the existing infrastructure struggles to support this growth, particularly in rural areas and tier-2 cities, where last-mile delivery remains a persistent challenge.

Amidst these challenges, an innovative digital solution ‘Galaxefi’ is emerging as a beacon of hope for Pakistan’s logistics sector. This platform represents more than just another digital tool; it’s a comprehensive ecosystem that’s revolutionizing cross-border trade through innovative technology. At its core, the platform leverages blockchain-powered documentation, utilizing smart contracts and distributed ledger technology to ensure transparent, tamper-proof record-keeping.

The platform’s real-time analytics dashboard provides comprehensive visibility into supply chain operations, complete with predictive analytics capabilities that enable proactive decision-making. Furthermore, integrated financial services create seamless connections to banking services, facilitating instant payments and trade financing. This fully digitized trade ecosystem streamlines cross-border trade processes and enhances operational efficiency, reducing documentation time by up to 60% and improving cargo clearance efficiency by 40%.

Strategic collaborations with local financial institutions like Easypaisa and Meezan Bank, and integration with the Pakistan Single Window (PSW) system, are proving transformative. These partnerships enable local traders to more effectively meet regulatory requirements while accessing essential financial services. The integration has dramatically reduced customs documentation time from days to hours through a comprehensive suite of digital solutions. The system performs automated compliance checking while facilitating digital document verification, providing real-time status updates throughout the process. The integrated payment processing ensures smooth financial transactions, eliminating traditional delays and reducing errors significantly.

For businesses looking to embrace digital transformation, the journey typically begins with a thorough assessment phase lasting three to four weeks. During this time, companies evaluate their current technological capabilities, identify key pain points and inefficiencies, define specific digitization goals, and calculate potential ROI. This is followed by an implementation phase spanning three to six months, where organizations start with pilot programs in specific departments before gradually expanding to other areas. Staff training and continuous monitoring are crucial during this period.

The potential for transformation is immense. With an estimated logistics sector value of $30.7 billion, Pakistan is strategically positioned to become a regional trade hub. Initiatives like the China-Pakistan Economic Corridor (CPEC) offer unprecedented opportunities to connect trade routes between China, Central Asia, Europe, and Russia. The future belongs to technology-driven enterprises. By leveraging artificial intelligence and blockchain technology, innovative companies are optimizing supply chains and improving financial access for underserved businesses. Partnerships with international firms not only bring global expertise but also facilitate local skill development—with training programs already certifying hundreds of logistics professionals in digital operations.

The transformation of Pakistan’s logistics sector requires immediate action from multiple stakeholders. Business leaders must prioritize beginning their digital transformation journey, investing in staff training and development, while actively seeking partnerships with technology providers and joining industry associations that promote digitization. Policymakers play a crucial role in this transformation by streamlining regulations for digital adoption and providing incentives for technology investment. Their support in infrastructure development and fostering international partnerships is essential for the sector’s growth. Technology providers must focus on developing locally relevant solutions with flexible pricing models, while ensuring comprehensive support services and maintaining strong collaborations with local institutions.

The journey to digital transformation has begun, and the promise is clear: a more connected, efficient, and competitive trade ecosystem that can propel Pakistan into a new era of economic opportunity. The time to act is now.