AN altogether new business of Logistic Support Service Providers (LSSP) has gradually emerged in the market over the last decade.

Years ago, a large number of businessmen started converting their factories at the SITE, Manghopir and Korangi into warehouses, when for one reason or the other, their industries got sick and closed down. A variety of raw material or finished products were stored just by erecting temporary sheds or godowns. “ There was hardly any concept of purpose built warehouses and temperature-controlled cold storages’’, Mr Ateeq ur Rehman Anwar, one of the pioneers in warehousing business, said.

Overseas Pakistanis, who, Ateeq said, were looking for investment opportunities, came in a big way in the last three years to set up modern warehousing in Karachi. The availability of relatively low cost land has encouraged many investors to set up modern warehousing facilities at Bin Qasim, Korangi, Mauripur, Hawkes Bay and Hub Industrial area.

Then there are innumerable small warehouses in densely populated residential areas like Kharadar, Lyari, Liaquatabad, Landhi, Malir, Jodia Bazaar, Motandas Market, Garden East, Garden West and Lawrence Road. These have caused many accidents.

More than a dozen companies are now offering modern logistics support services to trade and industry in Karachi. Quite a few of them have their own websites that give details of their services and description of their warehousing facilities.

Quality warehousing premises have 40 feet high ceiling, pallet and carton storage, warehouse management software, enough outer space for movement of heavy vehicles, automatic loading and unloading facilities and online web-based inventory reporting. But there are no fixed rules to determine rates for warehousing.

“Since the available space for warehousing is less than the demand because of increasing volume of trade, the warehouse operators are asking for very high rates’’, the president of Karachi Chamber of Commerce and Industry Mr Anjum Nisar complained.

Efforts were made by this correspondent to locate the federal, provincial or local government agency which controls or regulates operation of warehouses. There is no government agency which is directly involved in regulating the logistics support service. The City Government is expected to monitor storage of hazardous and dangerous goods in residential areas or their proximity.

Even the trade bodies and chambers have no data on warehousing, though they receive complaints about warehousing issues. The warehouses operate in SITE, Manghopir, Korangi, Landhi, Federal B Area etc., where trade associations operate. But none of these associations have data and statistics to inform their members of availability of warehousing facility. There is no standardisation of quality of warehousing and hardly any one cares if storage facilities are substandard and can damage merchandise.

Faizan Qureshi has constructed many grain silos and food product storages in Korangi. But he too is unaware of any quality grading of these warehouses.

The setting up of cold storages chain is something that has received some attention of the government at federal and provincial levels. Cold storage chain is a key to preserving and increasing the shelf-life of vegetables, fruits, dairy products, halal food etc.

The Punjab government has set up an agricultural marketing company as a public private partnership, the only province to have taken a step. A few months ago, Punjab Chief Minister Mian Shabaz Sharif announced the set up of five cold storage plants near international airports to facilitate exports of fruits and vegetables. These are to be located at Islamabad, Lahore, Faisalabad, Multan and Rahimyar Khan. A sum of Rs750 million was announced for this project.

In 2007, the United States Agency for International Development (USAID) offered financial and technical assistance to help increase horticultural exports. The first meeting of the implementation committee of a Task Force on Finance and Competitiveness of Pakistan’s Horticulture was held on July 12, 2007. But there is no information available as to how it was followed up. While local exporters of fruits have no idea, the TDAP officials are not aware as to what followed.

In March 2008, a memorandum of understanding was signed between the Infrastructure Project Development Facility and the Pakistan Horticultural Development and Export Board to set up 23 cold storages at airports, sea ports and across the national trade corridor to promote export of fruits and vegetables. The total estimate of production of fruits and vegetables is around 14 million tons a year. Of this, 12 per cent is lost because of the primitive nature of their handing and hardly half a million tons are exported

Under the project, 39 export pack houses equipped with grading, washing, waxing, drying, hot water treatment, packing and storage facilities at 31 different locations are planned.

The local fruit and dairy product merchants say that at one point of time there were about 1,500 cold storage plants. But bad taxation policy and rise in energy cost has led to the closure of many of them, restricting opportunities of halal food export.

As both government and businesses are engaged in tackling the current economic crisis, market operators say that the future development strategy should spell out specific measures to expand the chain of modern warehousing and cold storage facilities, with necessary safeguards, to promote trade. The national and international trade corridor project should include setting up of modern warehousing and cold storage plants.