National Logistic Cell: Embracing new challenges of Pakistan’s evolving industrial and trade landscape

DG NLC, Maj. Gen. Asim Iqbal, Hilal-e-Imtiaz & Tamgha-e-Imtiaz (Military), brings a remarkable combination of education and professional experiences to his assignments as head of National Logistic Cell.

He is a graduate of Command and Staff College Quetta, Armed Forces Staff College Malaysia and National Defence University Islamabad. His postgraduate studies include ‘Strategic and Defence Studies’ from University of Malaya, Kuala Lumpur; ‘Logistics and Supply Chain Management’ from Quaid-e-Azam University, Islamabad and he is also a member of ‘Chartered Institute of Logistics and Transport’.

Gen. Asim brings to table almost 30 years of experience of Operational Logistics, while serving in various parts of the country including Gilgit Baltistan, Azad Jammu & Kashmir, Swat and erstwhile tribal areas. He also served on logistic staff appointment at United Nations Headquarters, in Former Yugoslavia. He is a passionate tourist and naturalist by hobby and has authored books including “Operational Logistics”, “Amazing Pakistan”, “Captivating Kuldana”, “Wild Life of Kuldana” and “Customs and Manners”.

Editor GVS, Moeed Pirzada, sat down with him for a detailed discussion on Pakistan’s logistics and the role NLC is playing in it. This dovetails with our report examining Pakistan’s logistic challenges in the wake of CPEC linked SEZs.

GVS: Why was the National Logistics Cell created? What were the circumstances that brought it into being?

DG NLC: NLC was created in 1978 to handle crisis, which occurred on Karachi Port because of the congestion. A lot of demurrage was being caused because of the congestion and because of the waiting ships. All the inland movement northwards were held up, when Govt asked Pak Army to handle that crises. Responsibility was given to Quarter Master General (QMG) and thus NLC was raised by ‘Army Service Corps’, the logistic arm of Pakistan Army.

GVS: Why was there port congestion in 1978? Was it due to strikes?

DG NLC: Not really. Port congestion actually started a year back in 1977, due to insufficient management of warehouses and port handling facilities. Coupled with shortage of transport -road and rail both – it turned into crisis by early 1978. Thus NLC was raised to handle the congestion and transportation issues. National Logistic Cell not only successfully handled port congestion, but saved millions of dollars of demurrage, that Pakistan government was to pay because of the ships waiting to offload.

Having handled crisis in 1978, the organization continued with two significant mandates. One was to assist Pakistan Government (GoP) in all kind of emergencies, strikes and natural disasters and secondly to provide logistic back up to Pakistan Army in all kinds of emergencies, wars, mobilization and escalations.

The country and the Army needed such an organization for emergencies and crisis but perhaps could not afford such a huge standing component. Thus National Logistic Cell was given the mandate of self-sustenance and relevance; it grew as a corporate organization under Ministry of Planning and Development.

NLC is a self-sustained corporate organization, which is neither funded by the GoP nor by the Pak Army. There are some misperceptions about its funding, but the fact is that we earn from the projects won through competitive bidding, pay salaries to approx ten thousand employees and ensure our own compatible growth

GVS: You mentioned about the ‘Army Service Corps’ and the logistics of Pak Army, is NLC not part of Army Engineers?

DG NLC: No. It is essentially a logistic organization. That is why it was named as ‘National Logistics Cell’. Engineering branch was raised to support the core business of logistics and develop the required infrastructure. NLC is considered as logistics back up of the Army in addition to its utility during national crisis and emergencies.

GVS: Owing to its role, is NLC funded by the GoP or Pak Army? Where do you get your budget from?

DG NLC: That is an interesting Question. NLC is a self-sustained corporate organization, which is neither funded by the GoP nor by the Pak Army. There are some misperceptions about its funding, but the fact is that we earn from the projects won through competitive bidding, pay salaries to approx ten thousand employees and ensure our own compatible growth. We are not dependent on any kind of Federal or Defense budget. Thus, GoP and Pak Army has this Logistic organization at national level without spending anything on it.

GVS: So, how do you actually raise your finances?

DG NLC: Earning during peace time keeps us relevant and available during war and emergencies. For self-sustenance, we started using our transport commercially as our core business and earned from it in peacetime. Similarly, the engineers segment grew in its capacity and started picking up the projects commercially.

We have completed mega projects like roads, bridges, flyovers, railway rehabilitation, and many more development projects worth billions of rupees. By the way, we are also the highest toll collectors for NHA (approx 10-12 billion rupees contributed to NHA per annum), that too from winning contracts on open bidding.

I may add that our core and support businesses are conducted through competitive bidding and accounts are audited by both ‘external’ and ‘commercial auditors’. The profits earned thereof, keep us self-sustained organization.

GVS: So, the salaries of the NLC staff are not paid by the Pakistan Army?

DG NLC: No. NLC is completely self-sustained organization, with no budget from defense or any other head of the government. All salaries and all expenditure are from our own sources.

GVS: So how is it registered and incorporated legally? Is it incorporated as an entity?

DG NLC: It’s a good question. To say it in least words, it is a government-owned corporate organization, which is self-sustained. We have about 7 percent of military footprint, 8 % retired and 85% civilian component. The total strength varies from 9000 to 10,000 people. Their salaries and pension liabilities are all paid by NLC, including that of serving military officers.

GVS: Since its creation in 1978, what are the important achievements of NLC, reflecting back 40 years?

DG NLC: I think the first and the most significant was the port de-congestion of 1978. And then the list goes on: handling logistics in earthquakes, floods, droughts, strikes, road disruptions and railway challenges etc. Interestingly, we’ve also handled the railway strikes; NLC moved the trains when locomotive drivers went on strike.

We can go on tabulating, but the fact is that it has never been an occasion when there was an emergency or crisis in Pakistan and NLC wasn’t called for it. Similarly, whenever Army needed logistic back up in emergencies, escalations or field exercises we were always engaged. These are our top achievements and indeed justify our existence.

Moreover, our contributions to structural development of the country, our spending hundreds of millions of rupees on the corporate social responsibilities, our conducting vocational training for nearly seventy thousand students, giving direct employment to almost 10 thousand people at one time are all our landmark achievements. Today NLC is available to GoP for any kind of crisis situation, without any capital or operational cost, instead the govt owes billions of rupees to NLC as its vetted receivables.

GVS: Recently, NLC has launched NLC Rail freight services. What is that initiative?

DG NLC: NLC bought ten refurbished locomotives in 2014. These locomotives are in business with Pak Railways on wet lease. As part of the agreement, the maintenance of locomotives, provision of crew, their salaries and training, as governed by railway rules, is all NLC’s responsibility. Alhamdu-Lillah, it has been a good joint venture with Pak Railways, beneficial for both the organizations.

Pakistan is the only country in the world which is not using its natural potential of inland water transportation. We have our rivers, especially River Indus flowing in the direction of our trade routes but the potential remains untapped for decades now

In our efforts to work more closely with Pak Railways and complement each other, we jointly started “Express Freight Train” service from Karachi to Lahore, inaugurated by Minister Railways on 3 Oct 2019. Now we are looking forward to enhance the fields of collaboration. Next, we are planning to replicate Lahore Freight Train Model in KP, operating “Aza Khel Multimodal hub” together. This was recently inaugurated by Prime Minister. Both organizations can jointly contribute a lot towards all kinds of transit trade.

GVS: What is NLC’s position on the Axle Load Limit law?

DG NLC: Like all transporters, and most of Pakistanis, we are also supporters of implementation of Axel Load Regime. And if you ask me from business point of view, I would also support the Axle Load Regimes’ implementation. However, I also understand its implications and influence on other business and industry. Not only that cost of transportation rises, the speed of transportation also gets affected due to shortage of transport, with implementation of axle loads.

Perhaps we have to take a balanced position temporarily, meanwhile prepare the automobile and trucking industry to meet the potential demand of market. Implementation of Axle Load Regime along with transit trade and CPEC will multiply the requirement of trucks, for which local assembly needs to be encouraged and facilitated.

GVS: That reminds me of NLC’s engagement with Mercedes Benz, for local manufacturing of trucks. What happened to that initiative?

DG NLC: That initiative is still in place. NLC team met Daimler team couple of times last year, to pave the way forward. However, for some reasons could not keep the same momentum. Somehow, European automobiles companies fear investing in Pakistan.

They expect more assurances and ease of business from GoP. With better security and economic stability in Pakistan, plus revised government policies, I expect lot of foreign investment in this domain. Moreover, NLC continues to engage world renowned companies for local assembly of trucks.

GVS: What was the size of suggested investment?

DG NLC: A few billion rupees.

GVS: And they didn’t want to invest that?

DG NLC: No, though NLC was ready to invest more. Actually, modern technology is so advanced that the OEM feels that only assembly of Semi Knocked Down (SKD) vehicles would be possible in Pakistan, given our current capacity. While NLC, for national interest, prefers foreign investment, assembly of Completely Knocked Down (CKD) vehicles and later transfer of technology, to meet the growing demands of transport market.

GVS: But is there still a potential for materialization of such negotiations?

DG NLC: Yes, we are engaged in negotiations with few other firms and expect to bring good news to the local industry soon, In sha Allah.

GVS: Talking about Axle Load Regime and also CPEC, let me share with you that the industry executives that appeared in television discussions, pointed out that Pakistan has insufficient number of trucks. It does not have enough cargo trains and Pakistan also doesn’t have waterborne transport capabilities, unlike European countries, even India and Bangladesh. So are there any solutions? Is NLC thinking about water borne transport?

DG NLC: Very interesting question. Let me share with you that as a student of logistics and transport, it is part of my personal research also. My paper on the subject was published in Pakistan Army Green Book in 2017 edition.

Perhaps, Pakistan is the only country in the world which is not using its natural potential of inland water transportation. We have our rivers, especially River Indus flowing in the direction of our trade routes but the potential remains untapped for decades now. We had inland water transportation system in pre-colonial era, which did not grow because British wanted to encourage the railway lines, to promote import of their steel.

Water transportation is undoubtedly the cheapest mode of transportation in the world, followed by rail, road and air. It is interesting to note that one small size barge can carry 10 trucks load in River Indus and transportation cost is likely to be drastically reduced compared to any other mode of transportation

In 1947, we inherited Inland Water Transport (IWT) and Central Engineering Authority of Federal Government was responsible for it. Nothing was done in West Pakistan but East Pakistan Ordinance No. LXXV of 1958 was issued to set up an Authority for development, maintenance and control of inland water transport which later laid base for IWT Authority in Bangladesh.

GVS: So, do you really think that there is a potential of water transportation in Pakistan? And it will impact the industry?

DG NLC: Indeed, it is going to be a game-changer. Water transportation is undoubtedly the cheapest mode of transportation in the world, followed by rail, road and air. It is interesting to note that one small size barge can carry 10 trucks load in River Indus and transportation cost is likely to be drastically reduced compared to any other mode of transportation.

GVS: So, is there a plan?

DG NLC: Yes. The latest is that a few years back, Punjab government took an initiative, created the “Department of Inland Water Transportation (IWT) and tested a pilot project between Attock and Daudkhel. There was a feasibility study by Techno Consultant International (Pvt) Limited and Royal Haskoning DHV of Netherlands in 2015/16, on two routes of Punjab; Attock to Daud Khel (175 km) and Daud Khel to Taunsa (330km). The study opined that medium size barges are possible in River Indus after engineering solutions.

Lately, NLC has also been asked by the “Ministry of Planning, Development and Special Initiatives” to carry out a study and undertake this project if found feasible. I believe that if sincerely conducted this is doable and will bring paradigm shift in transportation and water management.

GVS: But many believe that we don’t have much water in the rivers and river transportation is not at all possible?

DG NLC: Perhaps our problem is not scarcity of water; it is rather a management issue. And even if water shortage is a real issue, its answer lies in water regulation, which is inbuilt solution for IWT also. We just need five to eight feet water in the river all along the way, which is not that a big challenge with storage, regulation and dredging solutions.

Probability analysis carried out on 20 years data at Attock Bridge revealed 95% probability of occurrence of water even without the engineering solutions. Water regulation will not only ensure the required water level round the year but will also address the issue of floods, and agriculture in addition to water transportation.

GVS: NLC has a role in the management of Border Terminals, right? How is NLC helping in the border terminals?

DG NLC: NLC was assigned this role in 2015, by the then Prime Minister and now we are operating all border terminals with our neighboring countries: Iran, China, Afghanistan and India. We provide management or say facilitation at the border terminals and a kind of one window operation for all stakeholders. We also provide IT solutions at the terminal, including passenger and cargo scanning. Scanning of the cargo not only reduces the time which was spent in manual inspections; it also brings a lot of checks upon smuggling.

GVS: What does the electronic scanning of trucks achieve? Can you see everything?

DG NLC: Yes. The scanner gives you an X-ray image of what is inside the cargo. It is like the luggage scanning at the airport. So, the complete cargo truck is scanned as it passes through the scanner. With this scanning NLC has been able to identify and seize huge quantities of narcotics, gold, weapons, ammunition, currency and many other contraband items.

Our contributions to structural development of the country, our spending hundreds of millions of rupees on the corporate social responsibilities, our conducting vocational training for nearly seventy thousand students, giving direct employment to almost 10 thousand people at one time are all our landmark achievements

GVS: Some time ago, there was discussion that huge pilferage and loss of revenue is taking place inside the Afghan Transit Trade and there was a debate that perhaps NLC can play some sort of constructive role by providing better monitoring. Is that happening?

DG NLC: The concern is genuine but NLC has not been assigned any such duty yet. Though, I would propose a model where one agency is given the overall responsibility for the transit trade, under a governing body, that can monitor, track, scan and also provide IT solutions for integration and security of information.

GVS: Could there be any possibility or NLC could actually conceive of a trans-country or transnational traffic towards Central Asian republics?

DG NLC: Yes. We actually made an effort and we went to China in 2019. We operated few convoys. The purpose of this was to analyze inter-border trade through Sost and Khunjerab, and then move on to Central Asia.

GVS: Going through China and not through Afghanistan?

DG NLC: Afghanistan is also possible. We operated to Afghanistan and back, we operated to China and back. But going to a third of country involves the licensing regime of TIR.

GVS: What is TIR?

DG NLC: It’s a licensing regime which is acknowledged and recognized for trans-border trade, by the signatory countries. It’s a French acronym (Transports International Routiers). Pakistan signed it a couple of years back. However, transporters and traders need to be encouraged and facilitated to register the vehicles under this regime.

GVS: Now we are due to enter the second phase of CPEC. We have now a CPEC Authority headed by Lt Gen (Retd) Asim Bajwa. What role can NLC play in the second phase of CPEC?

DG NLC: I will say that second phase of CPEC actually is much beyond logistics. It’s simply integration of a national effort which will also include logistics and transport plus multiple more facets involving industry and development of human resource etc. Most importantly, integrating all kind of stakeholders, private and public sector. So NLC is actually trying to play its role in best possible way.

We will also be contributing in the development of human resource. NLC is operating a few technical and vocational training institutions. We have already trained almost 70,000 students so far. And now we are linking it to the demand with reference to CPEC.

GVS: Can you help government in its initiative to promote tourism?

DG NLC: Yes! We can help government in its tourism initiative, because of our presence all over the country, starting from Sost to Gwadar and Karachi. We have our detachments and our establishments north to south and east to west all along the main roads. With its brand name, credible business record and newly coming up “rest and service areas” along GT road, NLC can do much for the tourism in Pakistan.

GVS: Ever since you took over as DG NLC, what have you done to improve the internal working, the processing of NLC?

DG NLC: With thirty years of logistics background, I thought of contributing in this sector of NLC first. It involved expanding laterally and vertically in our core business. You will be pleased to know that having integrated various logistic related business units NLC now provides end to end logistics, involving multimodal transport solutions. We are no more just a trucking company. Freight contracts now involve, transportation by road, rail, sea and air, having integrated the same with dry ports and warehouses.

GVS: Any steps taken to improve the human resource?

DG NLC: NLC has about 9000 to 10000 employees that are its core functional team. I mean the direct employees, but if we take into consideration the indirect employment through our projects and contracts the figure runs into millions.

The areas to focus were: merit-based induction, talent retention, correct succession and promotion planning, incentive based performance optimization, employees engagement and recognition program, all contributing towards making a “happy team”. The output of any team is directly related to its job satisfaction and happiness, and the same is now visible in performance and profitability of NLC.

GVS: Ok! my last question is while a DG may not lead NLC for longer than three or four years, but there must be a long-term vision of the NLC. What do you think at this stage is the long-term vision for the National Logistics Cell?

DG NLC: Interesting Question! NLC is completing its 50 years of existence in 2028 and last year we started working on a long-term plan. We call it “Vision 2028”, which will outline midterm and long term objectives, derived from revised mission and vision statements of NLC.

The objectives are being translated to tangible targets thus defining Key Performance Index (KPI). Thus the road map will be set for next ten years with defined targets. Moreover, the appointment of Chief Operating Officer, from corporate world has been introduced for bringing that culture along and also contributing towards institutional memory; hence your concern about the short tenure of DG NLC will be addressed.

GVS: So, by 2028, what are the essential areas within which the NLC will be able to make progress? For instance, will you be able to make some progress in a water-borne traffic? I mean, will you quantify that now? What areas would you think that NLC should achieve?

DG NLC: It’s a long list of objectives that we have set for ourselves in the fields of Logistics, Engineering and other support businesses. NLC aims at being the leading logistics organization, operating multimodal transport solutions across the world, meeting the challenges of CPEC. Focusing on its core and selected support businesses, NLC’s planned growth is four times in next eight years. As regards the water transportation, yes, I am convinced that sincere efforts in the right direction will bear fruits by 2028, In Sha Allah!