Transporters are not holding Pakistan hostage — policy failure is!

An opinion article “When transporters hold Pakistan hostage, ” published in Business Recorder on August 21, raises an important question: why has Pakistan become so dependent on road freight that a disruption in trucking can quickly affect factories, ports, exporters, wholesalers and consumers? The answer, however, is not simply that transporters have acquired excessive leverage and need to be disciplined through greater competition. That addresses the symptom while ignoring the underlying problem. Road transport contributes approximately 12 percent to GDP and provides employment to more than 6 percent of the national workforce. It is both capital- and operationally-intensive, requiring continuous investment in trucks, trailers, workshops, drivers, mechanics, technicians, safety and IT systems such as GPS and fleet-management technology. The Fleet Operators Association of Pakistan (FOAP) represents the organised corporate transport segment and supports a modern multimodal freight system in which road, rail and commercially viable inland waterways complement one another. But transporters did not abandon Pakistan’s railways, dismantle freight infrastructure, formulate tax policies, create fragmented axle-load enforcement or cause deteriorating roads, expensive financing and an ageing commercial fleet. They are operating within a system shaped by decades of policy neglect. The strike is a symptom, not the cause The August 8 suspension of goods transport was certainly disruptive. FOAP does not deny its impact. Any interruption in the movement of industrial inputs, exports, imports and essential goods affects the wider economy. But describing the action as transporters “holding Pakistan hostage” ignores why the sector reached that point. The recent action followed unresolved issues and commitments arising from the December 2025 transport crisis. When commitments remain unimplemented and problems accumulate, repeated negotiations eventually lose credibility. For a legitimate fleet operator, a strike is neither desirable nor profitable. An idle truck earns nothing while financing, salaries, insurance, maintenance and depreciation continue. It was therefore a desperate and peaceful measure of last resort—not a business strategy. The economics of trucking matters Freight rates are often discussed as though transporters can simply charge whatever they want. They cannot. A long-distance transporter must quote a rate before knowing future fuel costs, while bearing vehicle financing, maintenance, salaries, insurance, tyres, spare parts, empty return kilometres and infrastructure-related risks. Freight rates are determined by competition, cargo availability, truck supply, route economics and customer bargaining power. If operating costs rise while rates remain suppressed, the result is not cheap logistics—it is the gradual destruction of the formal transport sector. The 7 percent tax burden One of the most serious concerns for compliant operators is the 7 percent withholding tax on revenue. Taxing gross receipts at such a level can consume a substantial portion of an already thin transport margin. Taxing revenue is fundamentally different from taxing profit. The businesses most affected are often those trying to remain documented and compliant. If Pakistan wants to broaden its tax base, it should not create conditions in which formalisation becomes economically irrational. A modern logistics industry cannot be built by pushing compliant businesses towards the edge of viability while informal operators gain a relative advantage. Axle load: FOAP’s position is clear FOAP fully supports 100 percent implementation of the axle-load regime and road-safety standards. There is no justification for overloading. It damages roads, increases accident risks, raises operating costs, and creates unfair competition against compliant operators. However, enforcement must be uniform and effective. Overloading remains prevalent around ports and cargo origins. The answer is to stop overloading at the source. Consignors, loading points, weighbridges, transporters and regulatory authorities must form an integrated enforcement chain. It is also unfair to blame transporters alone when commercial pressures from cargo owners and traders can encourage overloading. If Pakistan genuinely wants to eliminate the practice, it must eliminate the economic incentive to overload. Roads became dominant because alternatives failed The article rightly argues that Pakistan needs stronger rail and waterway alternatives. FOAP agrees. But transporters did not decide through national policy to make Pakistan a road-dependent economy. Road freight expanded because alternative modes became increasingly unreliable, inefficient or unavailable for much of the supply chain. Rail freight requires modern locomotives and wagons, efficient terminals, reliable scheduling, commercial management and connectivity to ports and industrial centres. Inland waterways require navigability, terminals, handling facilities and commercially viable routes. These are long-term national investments. They cannot suddenly replace the thousands of trucks already moving the country’s cargo. Pakistan should therefore build alternatives without destroying the existing industry. Road transport will remain indispensable for first- and last-mile connectivity, locations without rail access, and flexible movement of cargo. The objective should be modal integration, not modal substitution. Pakistan needs an effective national transport policy The deeper issue exposed by the crisis is the absence of a coherent, long-term national freight policy. Pakistan has produced transport and logistics plans for years, but implementation and institutional continuity remain weak. FOAP proposes a permanent multi-stakeholder consultative forum for freight transport and logistics, bringing together government, transporters, manufacturers, exporters, importers, ports, railways and logistics companies. The forum should address: • taxation and withholding regimes; • axle-load enforcement at cargo origins; • vehicle financing and fleet renewal; • roads and infrastructure; • driver training and road safety; • rail-road integration; • port and terminal efficiency; • commercially viable inland water transport; and • a national multimodal freight strategy. This would be far more productive than waiting for crises, negotiating under pressure and then returning to business as usual. Do not shoot the messenger Pakistan’s logistics sector faces inadequate infrastructure, an ageing truck fleet, expensive financing, inconsistent enforcement and weak policy implementation. The answer is not to vilify the industry currently carrying the overwhelming majority of domestic freight. Transporters must be accountable when they violate the law. Overloading must stop, road safety must be non-negotiable and tax compliance must be ensured. But accountability must extend throughout the logistics chain rather than being selectively imposed on truck operators. Transporters, too, have a responsibility to the national economy. Strikes impose costs on businesses and consumers, and dialogue should always be the first option. But dialogue requires two sides—and commitments made through dialogue must also be implemented. The real hostage situation Pakistan’s economy is not being held hostage by transporters. It is being held hostage by policy discontinuity, weak enforcement, inadequate alternatives, taxation that discourages formalisation, obsolete infrastructure, and the absence of a coherent national logistics strategy. The August 8 crisis should therefore be treated not merely as a reason to condemn transporters, but as an opportunity to address the structural weaknesses that repeatedly turn manageable disputes into national disruptions. FOAP welcomes the call for logistics competition. But competition must be created intelligently: Build modern rail freight. Develop commercially viable waterways. Improve ports and terminals. Encourage private investment. Modernise the trucking fleet. Enforce axle-load limits at the source. Reform taxation. Improve roads. Establish permanent stakeholder consultation. Above all, recognise that a sustainable logistics system requires sustainable transport businesses. The transporter is not the enemy of Pakistan’s economy. The transporter is one of its essential service providers. If Pakistan wants uninterrupted supply chains, competitive exports and lower logistics costs, it must stop treating transporters as the problem and start treating them as partners in solving the problem. Pakistan does need logistics competition. But first it needs a policy environment in which every legitimate mode of transport can survive, invest and compete fairly. Copyright Business Recorder, 2026

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