The Perspective Of Supply Chain Management Commerce Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Multimodal transport (also referred to as combined transport) is the transportation of goods under a single contract but performed with at least two different means of transport. I.e. the carrier (in a legal sense) is liable for the entire carriage even though it is performed with several different means of transport (e.g. rail, sea and road). The carrier, however, does not have to be in the possession of all of the means of transport and in practice usually is not. The carriage is often performed by using sub-carriers, in legal language often referred to as actual carriers. The carrier that is responsible for the entire carriage is referred to as a multimodal transport operator (MTO). The U.N. Multimodal Convention (which has not entered into force and most likely never will) defines multimodal transport as follows: "'International multimodal transport' means the carriage of goods by at least two different modes of transport on the basis of a multimodal transport contract from a place in one country at which the goods are taken in charge by the multimodal transport operator to a place designated for delivery situated in a different country."

In practice freight forwarders have become important multimodal transport operators as they have moved away from their traditional role as mere agents for the sender and accepting a much wider liability as carriers. Also large sea-carriers have evolved into multimodal transport operators as they provide their customers with so-called door-to-door services, i.e. the sea carrier offers transport from the sender's premises (situated somewhere inland) all the way to the receiver's premises (also often situated somewhere inlands) instead of just offering more traditional tackle-to-tackle services or pier-to-peer services. Multimodal transport operators that are not in the possession of a sea vessel (even though the transport includes a sea-leg), are in common law countries, in the United States especially, referred to as Non Vessel Operating Carriers (NVOC). Historically multimodal transport developed in connection with the so called container revolution during the 1960s and '70s and today containerized transports are by far the most important multimodal consignments. One must however always bear in mind that multimodal transport is not equivalent to container transport and multimodal transport is just as feasible without any form of containers.

Pakistan's economy is increasingly complex, due in part to Pakistan's increasingly complex transportation system. A wise investor in industrial land development, therefore, will take full advantage of multimodal transportation: water, air, road, and rail. Perhaps the single most innovative development in multimodal transportation is the humble cargo container. The idea of shipping cargo in standardized, stackable containers is not original; it started back in the 1700s when items were shipped by crate. But over the last few decades, the shipping industry worldwide has embraced a 20-foot isotainer standard, enabling containers to be packed at a factory, loaded onto ships or flatbed trucks or flatbed train cars or even cargo planes and then transferred off to any of these, all without unloading the contents. Containers today carry about 90% of the world's cargo and increasing. This is the first thing investor needs to consider when looking at industrial land development: can investor ship his raw goods or finished goods easily using these standardized containers? This entails having appropriate roads to carry semi trucks, easy access to rail and water transit, and the capability of loading onto as many different forms of transportation as possible right at the factory.

Today India is emerging as a world power and its gaining market share in each of the markets in the world. In 90's India started an ambitious program aimed at the transportation of its economy towards a market driven export oriented system. Since then the economic growth of the country has been spectacular. The country's foreign trade is more than 500 million tons and it is expected to grow every year at a rate of 12%. This places on the infrastructure sectors significant challenges because in order to sustain such a rapid growth, the provision of seamless, cost effective, fully integrated multimodal transport system seems to be the only feasible possibility. These challenges are not only limited to massive investment but include also the acquisition of the knowledge necessary to manage and operating such systems. This will not be possible without the active participation of the private sector. Furthermore for these developments to take place a complete revision of the current pricing policies would be advisable in order to provide investors with reasonable rates of return. Last but not the least a clear government policy vision should be clearly stated.


Study to determine the;

Benefits of establishment of cargo villages near port areas.

Benefits of Gawadar port acting as a central point for transportation of goods from all over the world to Central Asia, Western China and other past of the world.

Loss from the absence of Cool and Cold supply chain in Pakistan.

Earnings from charging fare per mile for using Pakistani roads like in Europe (1€ per mile).

India's supply chain development and its expenditure on advancement of its supply chain and its infrastructure with modern techniques from Budget.


The research conducted on multimodal transportation system development in Pakistan will benefit the organizations in devising their supply chain according to the system proposed in this research. This research will also identify the key areas where Pakistan economy is suffering from huge financial losses due to several indicators highlighted in this research proposal. The research will also analyze supply chain importance of Gawadar port. Furthermore, this research will add to the existing knowledge and information on multimodal transportation system with respect to supply chain management.


Following are the possible obstacles that can restrict and limit this research in obtaining the aims and objectives. Hence, according to the existing situations and scenario the possible limitations of this research can be reflected as follows;

Being in a military organization research student may have limited access to several different areas in city and will also be restricted to leave unit on different days due to security conditions in city.

Respondent's behavior can also deviate, as they may not be willing for interviews.

Data access limitations can also arise due to presence to of insufficient information.

Respondents may not be willing to answer all questions of the questioner.

Material and information for cool and cold supply chain and cargo villages in Pakistan may not be available as secondary data for research.

Model like financial models may also be not present for some parts of research.

Respondents may not like to highlight their name in research as reference; this can affect the credibility of research.




The geographic location of Pakistan (30°00'N 70°00'E) makes it a natural trade corridor, on its one side are energy, industry, agriculture and technology starved countries and the other side energy, industry, agriculture and technology rich countries. On one side are warm waters and on other side are landlocked countries. Although India is making a continuous attempts to undermine the significance of Pakistan by developing Chabahar Port (25°17'28''N 60°38'15''E) in Iran which is just 72kms (44 miles) from Pakistan's deep-water Gawadar port. Pakistan still offers the most efficient and cost effective transit facilities to Central Asian countries, Afghanistan and China. In order to achieve this objective Pakistan have to be focused on building Cargo villages and all other cargo facilities near its ports for easy, effective and less expensive handling and storing of all sorts of cargo bulk, break-bulk and containerized cargo, bulk liquid and grains and as well as cement handling facilities. On other hand upgraded and modern railways and road networks have to be constructed to minimize the transit time. To built a strong supply chain harbor and boost up its own supply chain for exporting its goods to all parts of the world efficiently and effectively with fast transit time Pakistan needs to focus on construction of cargo villages near Pakistani ports (namely Gawadar port, Karachi port and Qasim port), develop a cool and cold supply chain system for transport of fresh fruits and vegetables, make Gawadar port a port that just not serve Pakistan but also Western China, Afghanistan and Central Asian countries better that any other port especially Chabahar Port, Pakistan needs to view the steps taken by Indian Government to boost up India's Supply Chain Development as India is our strong competitor in this field and Pakistan needs to develop a proper fare system for its Motorways, highways and other roads so those who (whether Pakistani or foreigner) use Pakistani roads for transportation of their goods pay proper fare to the Government of Pakistan which will add an extra penny to the treasure of Pakistan.


For building up an efficient supply chain a strong multi modal transportation system is needed. Transportation is an indicator which measures the economic, social and commercial progress of a country. It has transformed the whole world into one organization and greatly contributed to evolution of civilization, transportation is the most visible element in logistics (Sople, 2004). There are four modes of transportation Road, Rail, Water and Air. Any international business may combine the following four modes to reach the destination from the origin (Sudalaimuthu, Raj, 2009).
















Modes of transportation

Source: Sudalaimuthu, Raj, (2009). Logistics Management for International Business, 2nd edition, PHI, New Delhi, Page 40.

Multimodal transport is the movement or transportation of goods and products under a single contract but performed with more than one mode of transport. The person to whom the single contract is assigned is named as carrier in a legal sense, who is responsible for overall transportation of goods and products even if is transported with several different modes of transport like rail, air and road. It is not necessary that the carrier must be in the possession of all of the means of transportation and even it doesn't happen that way mostly. The carrier mostly uses sub-carriers to perform the transportation. The carrier that is responsible for the entire carriage is called as a Multimodal Transport Operator. The main function of multimodal transportation system is to integrate different modes of transportation according to the necessity of transportation and time to best match the requirements of the transport route. Reducing time and cost of supply chain is very necessary and for this purpose the transportation system i.e. multimodal transportation system should be very efficient and effective. To meet such objective the transportation route is incorporate with different modes of transport like Rail, Road, Air and Sea so that time and cost both are minimized to lower possible level. Such transportation system is essential for Pakistan to transport its goods to all parts of the world at right time and right cost, because most of the perishable items and goods are wasted due to delay in supply chain which is caused by delay in transportation system.


Karachi port is getting overburdened day by day with severe congestion from fishing, commercial shipping and military shipping and from a strategic point of view it is now becoming very difficult to manage a of that together efficiently, not just because of inadequate and inefficient cargo handling facilities but also due to goods passing through congested roads. The Indian Navy targeted the port in 1971 and any blockade in future could cripple trade activities if Pakistan continues overreliance on Karachi port (Kazmi, 2011). With the construction of Port Qasim this pressure at Karachi port was bit eased but still the pressure on Karachi city as a whole remained, but soon with the construction of Gawadar port this problem was also be supposed to be solved. The Phase-I of Gawadar port whose 75% cost is covered by Chinese government has been completed. The existing docks are now operated by Port of Singapore (Kazmi, 2011).

Gawadar port is still non-functional. It still lacks roads and rail connectivity and its usage has so far been restricted to bulk cargo such as wheat and urea. China which provided 80 percent of the initial $248 million development costs, has been trying for taking operational control over Gawadar port. In June 2006, a Chinese company had also expressed its interest to operate the port but it could not win the bid for running the port. China has reportedly offered Balochistan government that it would construct 20 more berths from the present five and make the port operational if it takes charge of Gawadar port (Haider, 2011). Presently operational control over Gawadar port is under Port of Singapore Authority (PSA) as former President Pervez Musharraf's government gave the operational and management control of Gawadar port to port of Singapore Authority in February 2007 for 40 years time period. Gawadar is a multi-billion dollar project which is still not fully operational due partly to our own incompetence and partly to the conflicting interests of major global players. However Gawadar port can play the role of economy booster for Pakistan, as it is strategically located at one of the most suitable place of the area, it can serve multiple countries from its point of location, due to the presence of Gawadar at the mouth of Strait of Hurmez ships would not be required anymore to enter Gulf by crossing Strait of Hurmez and can be entertained at Gawadar only which would save time, money and fuel for them as Gawadar shall become the first choice for them, as Gawadar is at the stage of development the cost of services provided here shall also be lower than other competitor ports in the area which is another plus point for Gawadar, in upcoming decades Gawadar port is considered to become the hub of transportation for the world due to its important and significant location.

China shows a keen interest in development of Gawadar port as China know very well that Gawadar port shall connect China to other part of the world more efficiently as cargo ships coming for China shall unload their cargo here at Gawadar and then it shall be transported to China through rail and trucks, in this order time and cost shall be saved. Gawadar port shall also be a golden port for Central Asian countries and Afghanistan as they are land locked countries and they are in a big need of a port that will serve them and help them to export and import goods efficiently and effectively. Gawadar port is the golden bird for Pakistan that will support and boost Pakistan's economy to higher levels and shall generate revenue for Pakistan.


Supply chain is a vast field which deals with a number of different types of products like fruits, vegetables, pharmaceuticals, frozen goods and organic products which require cool and cold supply chain for their transportation, distribution and storage. Huge part of Pakistan's exports is based on agricultural goods. These agricultural goods needs a proper cool and cold supply chain for their transportation from one point to another, because all these organic products are perishable in nature and they start to decompose rapidly with their exposure to the environment. Nestle deals with a number of product that requires a cold chain for their transportation, according to Nestle Pakistan they achieved a milestone in 2002 by establishment of a cold chain in Pakistan for transportation of their products.

Cold and Cool supply chain is a part of supply industry which deals with transportation, storage and distribution of frozen and organic products which require constant temperature for their storage, transportation and distribution. It also deals with equipments and operations that are used to maintain correct temperature for frozen and organic products in every conditions and scenario. Moreover the environment in which the products are kept must be constant and not changing as it will have an adverse effect on temperature of product. Even a little alteration in the temperature of the environment in which the product is held will lead the product to thaw even though the product may still appear in correct condition. Even slow freezing is not required as slow freezing creates large ice crystals, which may damage the food structure and cause deterioration in product quality. To avoid such problems to occur a proper and suitable cool and cold supply chain is very essential. Keeping in view the importance of the cold chain, Ministry of Commerce, Government of Pakistan, initiated to carry out a Prefeasibility study on "Establishment of Cold Chain System" under "National Trade Corridor Improvement Project". M/s Arch Vision, was assigned to conduct the studies, while, Pakistan Horticulture Development & Export Board (PHDEB) was responsible for overseeing the project. So Government of Pakistan and other private sectors operating within Pakistan are working together for the establishment of cool and cold supply chain in Pakistan for better handling of perishable items.


Cargo villages are those storage warehouses where cargo is kept for storage in between their transportation. The Karachi Port Trust plans to develop the western backwaters of the Karachi Port as a "Cargo Village and Industrial Park." This decision has been based on a feasibility study including master plan prepared for the proposed project in 2004. The western backwaters of the Karachi harbor cover a total area of about 2,590 hectare or 6,400 acres. The Cargo Village and Industrial Park shall utilize 530 hectares, which means reclaiming over 20 percent of the total area of the western backwaters. The Cargo Village and Industrial Park would be located in the northern part of the western backwaters, west of Karachi Fish harbor and south of Machhar and Mohammadi Colony. According to the KPT the location offers good approach to Lyari Expressway, ICI-Bridge and shall be connected to the future Karachi Harbor Crossing from Keamari Groyne Deep Draft Container Port (Anonymous, 2009). Furthermore Karachi Port Trust also plans to connect these proposed cargo villages with railway system of the Country (Anonymous, 2009). This action of KPT will speed up the cargo transportation system of Pakistan. For proper management of cargo villages cool and cold storage facilities are also established within these cargo villages for proper handling and storage of perishable items which are highly affected by temperature variations and environmental changes like humidity and other factors.


Today India is emerging as most important competitor in almost all the economic fields for the market leaders in the world. India's is trying to establish a very strong road network for its supply chain development. Roads are vital for the economic development and trade of a country, because roads help in smooth conveyance of goods from one place to another. Today the total length of roads has significantly increased from 3.99 lakh km to as on 31-3-1951 to 41.10 lakh km as on 31-3-2008 (Sensarama et al., 2010). The mission of Indian Department of road transport and highways is "Enabling INDIA to have sustainable, efficient, safe and internationally comparable quality of road infrastructure in general and National Highways infrastructure in particular to achieve enhanced, quick connectivity, mobility to a level which accelerates and does not in any way constrain socio-economic development" (RFD, 2011).

According to Outcome Budget, Government of India (2010-2011), the total investment on the development of roads and highways for improved supply chain in Indian Budget 2010-2011 is approximately Rs. 27,100.00 Crores. Similarly according to Statement of budget estimates-Plan (2010-2011) the plan of budget estimates planned for Indian shipping industry is Rs. 6,494.15 Crores. All these budget estimates shows the amount of money Indian government is expected to spend on the development and improvement of their shipping, road and transport industry in order to develop an effective and efficient supply chain within the country and outside the country.




The state of current knowledge about the nature and role of supply chain in development of multi modal transportation system calls for adoption of a specific research method, because the main theme of my study is to explore the benefits and importance of multi modal transportation system in supply of cargo from one place to another and creation of cargo villages for these cargo at an appropriate location best available, plus the steps taken by India in the development in their supply chain shall also be focused, for such research case exploratory type research is one way that suits in solving and understanding such issues on which research is conducted . For this purpose qualitative research method best suits the study as it shall cover all the areas of research and shall analyze all the issues. Qualitative research is a useful method when the concepts need to be explored for clear understanding. The case also requires analyzing the previous literature and information available and primary research to collect data and observe it. Qualitative research includes an array of interpretive techniques which seek to describe, decode, translate, and other wise come to terms with the meaning, the both not the frequency of certain more or less naturally occurring phenomena in the social world (Cooper & Schindler, 2003 ). Qualitative techniques are used at both the data collection and data analysis stages of a research project.


The research approach to be followed for this research shall be Deductive approach, because a deductive approach upon the topic shall be conducted and it shall begin with a wider horizon which shall further be narrowed down to specific points and issues figured out. Descriptive study shall also be used because in descriptive study detailed study of everything is done and each point is defined in an appropriate manner. Descriptive study is often used in business research, because this approach is used for complex studies, such as a complex transportation system. This approach also assists improve understanding of difficulties and complexities of a business phenomenon in order to implement a strategy (Cooper & Schindler, 2003).


Research design constitutes the blueprint for the collection, measurement and analysis of data, furthermore it aids the researcher in the allocation of limited resources by posing crucial choices in methodology. Research design is the plan and structure of investigation so conceived as to obtain answers to research questions. The plan is the overall scheme or program of the research. It includes an outline of what the investigator will do from writing hypotheses and their operational implications to the final analysis of data. It expresses both the structure of the research problem, the frame work, organization or configuration of the relationships among variables of a study, and the plan of investigation used to obtain empirical evidence on those relationships.

Data Collection:

The primary data shall be collected from Interviews and Surveys and the secondary data will be collected through internet, books, magazines, journals and etc.

Sample Size:

In order to accumulate information regarding multi modal transportation system researcher have decided to conduct approximately 13 interviews with experts from the field of multi modal transportation system and supply chain management.

Sampling Technique:

The sampling technique that will be followed will be using snow ball sampling and focus groups for interviews as random selection for interviews will not be appropriate, and for surveys a systematic survey shall be conducted for my research topic. Focus group is the simultaneous involvement of a small number of research participants, who interact at the direction of a moderator in exploratory studies; usually last 90 minutes to 02 hours; can be conducted in person or via phone or videoconference (Cooper & Schindler, 2003). Snowball sampling a non-probability sampling procedure in which subsequent participants are referred by current sample elements; referrals may have characteristics, experiences, or attitudes similar to or different from those of the original sample elements; commonly used in qualitative methodologies (Cooper & Schindler, 2003). Survey is a measurement process using a highly structured interview; employs a measurement tool called a questionnaire measurement instrument, or interview schedule (Cooper & Schindler, 2003).


The proposed study required expert opinion from the decision makers of the field therefore it is very important to conduct interviews to accumulate qualitative data. The measurement / analysis on the collected data will be done using the appropriate measurement technique. The interviews conducted will be structured and there will be approximately 15 questions asked. Time limit for these interviews will be approximately 20 minutes with each interviewee. Interviews are expected to be done with following experts of the field;

Rear Admiral Sayyid Khawar Ali SI(M) (Commander Karachi, Pakistan Navy)

Mr. Babar Badat (Vice President FIATA/Chairman, TIR Commission Pakistan)

Mr. Imran Shaikh (Managing Director, DHL Global Forwarding Pakistan)

Mr. Moin Ahmed Malik (Chairman, Pakistan International Freight Forwarders Association)

Mr. Hasan Leghari (Country Operations Manager, DHL Pakistan)

Mr. Sohail Shams (CEO, United Marine Agencies)

Mr. Sohail Yaqoob (General Manager, PIA Cargo & Speedex)

Mr. Shahan (Lecturer, Agriculture department, University of Karachi)

Mr. Tariq M. Rangoonwala (Chairman, International Chamber of Commerce)

Mr. Javaid Mansoor (Executive Secretary, National Trade & Transportation Facilitation Committee )

Mr. Mohammad Hanif Ajari (Vice President, ICMAP)

Mr. Ahmed Haroon (General Manager Commercial, Agility Logistics)

Mrs. Nasreen Haque (Chairperson, Karachi Port Trust)


Time required to complete my research shall be approximately 345 days depending upon the law and order situation in the city (for table see Appendix 1).