Optimizing multimodal logistics networks connecting Arabian Sea ports with landlocked countries in Central Asia

Posted: March 24th, 2023

Optimizing multimodal logistics networks connecting Arabian Sea ports with landlocked countries in Central Asia
1. Introduction
During the last 30 years or so, it has been seen that the general orientation for world trade has been more towards containerization, due to the versatility and security of the cargo. With the advent of new and high-tech container vessels, large quantities of cargo, particularly that of the trans-shipment nature (i.e. the cargo which is bound for another port), have been loaded onto these vessels. From that point, the concept of the hub & spoke system has taken an upturn. Many of the present-day world sea trade routes, particularly those between the Far East and Europe, are utilizing the central hub ports for loading cargo which is to be discharged at some other port and mostly using trans-shipment. The route taken by the cargo at both ends is more than a sea leg. This has opened a new mode of logistics known as multimodal transportation.
In the wake of these advantageous factors for trade, the question arises: how to make good use of the geo-strategic location of Pakistan, being a junction between the Middle East and Central Asia with representation at the Arabian Sea? The capabilities of these landlocked Central Asian countries are also not to be underestimated, as they also possess large deposits of minerals and agricultural produce. But due to the lack of resources, particularly in the case of infrastructure, and above all, no outlet to the sea, they have been isolated from international trade and have experienced a considerable cut in their exports.
Trading at the commercial level has always been at the heart of all logistic activities, as logistic transportation can be easily taken as the facilitator for trade that is conducive for the expanding of trade. Pakistan is blessed with all the natural and climatic resources. It has ample cultivable land, a vast variety of agricultural produce extending from tropical to temperate, minerals, and above all, a location on the map of the world that gives it a head start for being a successful trading nation.
1.1 Background
Logistics systems incorporate land, air, and water links between production fields, markets, and terminals. These are vital for trade and economic development and are further known to decrease poverty when efficiently organized (World Bank, 2005). The nature and efficiency of logistics systems vary greatly between the Arabian Sea and Central Asian regions. Using Pakistan as an intermediary example, we see that its location and geography have made it a vital transport corridor between the regions, and therefore it enjoys a fairly efficient logistics system. This includes ample road and rail links to major ports, for example, the Karachi Port and newer ports like Port Qasim. In comparison, Central Asian countries such as Uzbekistan, Kazakhstan, and Tajikistan are at a disadvantage due to their lack of direct access to ports and high costs associated with low-quality border crossing and customs procedures. This has made the cost of exporting and importing goods excessively high (Djankov et al., 2006).
Economic integration and globalization have made the logistics industry more vital and important in both developing and developed economies. It is seen as a major tool used for development and to enhance trade. The economies in the Arabian Sea region and the dumped countries of Central Asia are in different stages of economic and trade development; however, trade is significant in both regions. There is substantial potential for both exports and imports, for example, Pakistani textiles and, in the other direction, Japanese investment in Pakistan (Ali, Salahuddin, Bilal, and Numan, 2004). The highlight of the Middle Eastern region is its wealth in oil and other petroleum products, leading to high levels of trade and economic activity. Their trading partner, China, which has become a major player in the world economy, is looking towards Central Asia. Being landlocked, these countries have trouble finding access to Asian and Middle Eastern ports for trade and, in turn, both regions can greatly benefit each other.
1.2 Problem Statement
For Iran and Turkey, a better understanding is needed about the necessity of providing both cost-effective and efficient supply chain solutions for the Central Asia region nations. Simulation and optimization would also help to determine the intermodal service requirements and the extent to which usage of outside services using the Arabian Sea ports provide benefit. The final key problem in this region is assessing the impact that geopolitical factors can have on the movement of goods between specific Central Asia nations and potential risks imposed for using specific transportation routes. This area of research would involve identifying the risks and expected costs for movement of goods between different origins and destinations within Central Asia and using that information to determine the best route at any given time.
There are two kinds of transportation networks in the Central Asian countries. The one associated with the Russian Federation is well developed and efficient, using primarily rail and road with seaports in the Baltic region. The second, less efficient network for those countries not sharing a border with the Russian Federation, relies on Iranian and Turkish trucking using the road network and very limited rail infrastructure. Understanding the advantages and disadvantages of both transportation networks is crucial in order to determine possible shifts in the movement of goods through the Arabian Sea into the future and the extent to which current rail and road infrastructure development projects within Central Asia and into Iran and Turkey can alter these patterns.
1.3 Objectives
Establishing secure, reliable, and affordable multimodal transport routes would only help Afghanistan and Tajikistan to gain easy access to the Arabian Sea while the countries of the region fulfill their two centuries-old quest for diversified access to the sea and global markets. The available air and semi-trucking services to these countries are several folds more expensive compared to the enhanced modes of multimodal transport. The conventional transport way in Afghanistan, using pack animals for imports and exports, resulted in extremely higher costs and time, therefore becoming less competitive with other products in the world market. This caused the trade volume of Afghanistan to drop radically in the past two decades. In addition to aiding these countries with cheaper and secure transport, it’s also the objective to exert the de-congestion of large commercial centers in Pakistan using long-haul trucking and semi-trucking services for the movement of cargo to Afghanistan and Central Asia.
The creation of a regional South and Central Asian economic corridor can only be achieved by connecting and harmonizing various regional economic and trade initiatives into an integrated framework. The establishment of an efficient transport system, by rehabilitating the war-affected major highways, developing new road networks, and maintaining vital bridges, can be a key to unlock the vast economic potential of the region. This can lead to job creation, poverty reduction, providing access to social services, and linking isolated communities to the center of economic activities. The snow and landslide clearance program would enable the high-value-added products of Central Asia to have access to the warm water ports throughout the whole year. This can prevent an annual loss of millions of dollars caused by delays and damaged cargo due to the present non-availability of a more secure and fast transport to the global markets.
2. Literature Review
For a better understanding of the dynamics of what may still be a partial and convoluted set of direct linkages, Abdelgawad (2007) and Abdelgawad and Mahmassani (2007) have given an effective qualitative overview methodology. In terms of computer simulation with a generalized model to represent the supply chain, Parida et al (2007) offers a more specific hypothetical representation of chosen mode linkage in developing the relative comparison of sea with the more complex and interconnected networks of land transportation, an important issue in itself given the varying authentic infrastructure of different Central Asian nations.
The region directly north of the Arabian Sea has been identified by Haq et al (2003) as a specific case where major sea ports of Pakistan and a diversity of ports in Western India, India being a detailed and separate issue as the hearth of many locally complex logistics networks, are being underutilized in connection to a rapidly growing trade with Central Asian Countries in the post-Soviet independence era. This area is inherently strategic but lacks significant economic validity due to the unstable political situation in the case of Pakistan and the specific economic geography of certain Indian ports (Haq et al, 2004). This paper has identified a wide range of issues primarily pointing towards the desire and potential of creating more direct linkages between the sea and land transportation in the region.
Throughout history, the sea has been a computer, a metaphor of the mind, and an arena where cultures intermingle and compete. The complex networks of exchange inherently involved united disparate regions, fostering their economic and socio-cultural development (Richards, 2003). The importance of sea transportation in a logistically globalizing world still holds today and there is still a necessity to effectively link, both in time and cost-effective manners, sea transportation to inland destinations and production or consumption centers (Song and Yeo, 2004). This in the context of moving the majority of goods by sea between continents and countries, to an emerging focus on bringing major trade arteries to less developed locations (Ng, 2005).
This process shows a shift in transportation theory with contemporary methods focusing on the global economy and production processes, implying that the main research challenge is not so much the development of new technology but the development of more efficient transport organization and management (Hesse and Rodrigue, 2007).
Multimodal logistics is defined as the coordinated movement of freight from origin to destination by several modes of transport, using combined sea, road, rail, and air transport with transhipment of containers and the unitization of cargo (Song and Yeo, 2004). Transportation is used as a means of representing economic and social currents and is underpinned by globalization, in moving towards a more complex and contextually variable socio-economic order that is more interconnected via political, economic, and socio-cultural processes (Hesse and Rodrigue, 2007).
2.1 Overview of Multimodal Logistics Networks
Multimodal logistics networks involve the use of two or more combined modes of transport. The importance of such networks has grown in recent years, with increased globalization and the liberalization of international trade. The effectiveness of a logistics network can significantly affect a nation’s cost of trading and its global competitiveness. Countries such as landlocked Central Asian countries and those in the Arab world are dependent on access to ports to engage in international trade. Central Asian countries are particularly dependent on good access to ports since geographical constraints limit their other options. For these countries, the ability to trade freely on a global scale is a relatively new concept and one that holds the promise of facilitating greater national and regional prosperity. In the case of Afghanistan, re-establishing access to international markets is seen as crucial to its long-term economic development. The Arab Gulf states, on the other hand, have long been involved in international trade and are major exporters of oil and other goods. Due to the high-income nature of these countries, the motivation for them to improve their current trade links by accessing more reliable and cost-effective logistics networks is driven by a desire to maintain global competitiveness in the export market. In both cases, a major key to success lies in the improvement of access to global markets via more reliable and cost-effective transport of their goods to and from major ports.
The trade of Central Asia is currently dependent on Russia, as their options for both importing and exporting are limited by the poor state of transport infrastructure in the region. This means the export of goods often has to be done via Russian ports, which, due to political instability in the region, can often be an unreliable option. For the Gulf states, the trade is obviously centered on the Arabian Sea and, to a lesser extent, the Mediterranean. In assessing the current situation and the problems in moving goods to and from major ports, a useful model can be to consider the trade-dependent countries as regions in which the main focus is the movement of freight to and from the sea ports. This freight usually consists of goods such as foodstuffs, raw materials, and general imports, and the aim is to move it to or from a specific port as cheaply and reliably as possible. This freight movement can be considered a classic transportation problem, and the solution lies in providing the best possible mode of transport with respect to cost and reliability.
2.2 Importance of Arabian Sea Ports
There are seven countries bordering the Arabian Sea. These countries have a big stake in the ports and have varied national-level policies to exploit the port potential in terms of doing business and the port’s dynamism to act as a vehicle for economic growth. The ports, to a large extent, are mostly owned, managed, and operated by the public sector and have opened up for the private sector through different forms of privatization and policy liberalization. With today’s extremely stiff global competition witnessed among ports in terms of handling cargo movement, the struggle to sustain contracts is more relevant to ensure that the Arabian Sea port is linked through a variety of creative development activities.
The importance of the Arabian Sea port is not only earmarked by its rich history. It is of immense economic importance and holds a crucial position in today’s multipolar world that will have a significant impact on its future. The Arabian Sea is situated at the crossroads of the enterprising dynamic economies of South and Southeast Asia and the booming energy-hungry economies of the West. It is essential that the natural advantage of its historical role in linking these regions is properly exploited to catalyze economic activity and provide impetus for faster GDP growth. The realization of the concept of port-led development, the development of port-based industries, and the port’s role as a pivot for the development of the region are recent trends that are relevant to the concept of the importance of the Arabian Sea port and its role in achieving national economic objectives.
2.3 Challenges in Connecting Arabian Sea Ports with Central Asia
Absence of coordination among concerned agencies, lack of proper and timely information about cargo and container movement, absence of modern facilities and equipment for handling cargo, lack of trained manpower, poor inter-modal transportation mechanisms, and severe security threats all go to make the logistics operations inefficient and expensive. This is true for both the landlocked Central Asian countries and the sea ports. In Central Asia, humanitarian operations, implemented mainly by UN and its affiliate agencies, cover large geographical areas with difficult access conditions. Transportation of relief supplies in and out of these countries is therefore a critical and costly factor. Security threats also have a significant impact on certain logistics operations in this region. The Joint UNECE/OCHA Mission to Tajikistan in 2002, described the condition of road infrastructure, “The total length of the network is about 25,000 km, of which some 13,000 km are considered as strategic roads. However, the bad state of roads and bridges, and landslides as well as floods, block certain sections of the network for long periods during and after the winter seasons. In some cases it may take two or three days (or even longer) to cover 100 km” (Sohn, 2008). This puts an extra burden on the carriers in terms of time and cost. The inadequacy of infrastructure coupled with these complicated and at times insecure environment increases the difficulty and cost of operation for the carriers and the logistics service providers. As the connectivity of Central Asia with the rest of the world depends on the sea ports, the transporting mode is mostly multimodal. The significant reduction in transport costs and time can be achieved if we can improve the efficiency of the multimodal transport taking place to and from Central Asia. On both ends of the multimodal network i.e. at Arabian sea ports and in Central Asia, high transportation costs and long, uncertain transit times are prominent issues. Improvement in efficiency of the multimodal system requires an integrated, synchronized and coordinated effort and solution. High transportation costs and long, uncertain transit times are prominent issues. Improvement in efficiency of the multimodal system requires an integrated, synchronized and coordinated effort and solution. This is currently lacking and is a major barrier to achieving seamless connectivity between the two. High cargo and transportation costs add an extra burden to the Central Asian countries, many of which are economically weak.
2.4 Previous Studies on Optimizing Logistics Networks
In the recent years, certain researchers can find the optimizing studies on logistics networks. A study done by Martí et al (2008) on optimizing a multiple-objective maritime inventory routing problem that was relatively near to our objective of integrating the maritime and inland transportation. The study concerned on finding the least cost routing and scheduling of a fleet of ships to transport the cargo from a single supplier to the several buyers with periodic delivery pattern. This model shared several similarities with our problem with the exception of their vessel scheduling problem was more concerned about an inventory routing problem and their hinterlands solution was relatively simple as compared to our multiple inland transportation modes.
In the same year, Kanak and Chandra (2008) also did a study on a vessel fleet scheduling problem that came close to integrating with a land based multiple transportation system. This study was aimed to minimize the total time of transporting of the goods from an inland location to a port and then to another inland location using multiple number of ships on a predefined network. Their study was more towards solving a vehicle routing problem with the maritime aspect but the concept of integrating marine routing and inland transportation was a step towards our objective.
3. Methodology
The second research component will involve a detailed case study analysis. A case study methodology enables investigation of a contemporary phenomenon within its real-life context using multiple sources of evidence. According to Yin (2002), the case study is the preferred method when how and why questions are being posed, when the investigator has little control over events, and when the focus is on a contemporary phenomenon. RP2 will involve comparative case studies of transport infrastructure improvement projects in Iran. These will be used to develop a deeper understanding of how transport infrastructure development can effectively serve Iranian trade objectives in the Arabian Sea. The case study research will be undertaken using a mixed-method approach with both qualitative and quantitative analytical techniques. A key strength of the case study research will be the ability to engage with stakeholders from the public and private sectors in both Iran and Pakistan. This will facilitate participatory research methods and allow a detailed investigation of the complex political and institutional considerations that underpin trade infrastructure development.
A variety of different transport infrastructure improvement projects/link upgrades could be generally implemented between Iran and the Arabian Sea ports. These could include new road and/or rail links (including tunnels through mountainous areas), construction of pipelines and/or conveyor belts, and the development of the best mix of port handling facilities. RP1 seeks to develop a decision-making framework that can be employed to compare the relative effectiveness of these different alternatives. This will be achieved by developing a multi-criteria assessment framework to address the following research question: How can Iran’s decision makers determine the optimal mix of transport infrastructure for importing and exporting goods through the Arabian Sea? This research will build on the extensive body of transportation decision analysis research conducted by the research team. A key outcome of the research will be to provide clear policy advice to the Iranian Government on the best way to achieve its trade infrastructure development objectives with Pakistan.
It is proposed to develop a research framework consisting of two components. The first component is to develop a generic research and decision-making framework that can be used to systematically analyze and compare different logistics infrastructure improvement projects. The second component is to apply this framework to the specific context of Iran. The proposed research approach is based on the following assumptions.
3.1 Research Design
A comparison involving identification of the transition points from sea to land transport in Pakistan and Afghanistan will be used to analyze differing means of transport to Afghanistan (road, air, etc.), in terms of time, cost, and reliability. This will provide a detailed assessment of the current situation and credibility that a shift to a more efficient logistics plan in the future would be beneficial.
The first task is to identify the current situation in Afghanistan, the issues, and their corresponding causes on the current logistics network in the country. This information will be gathered from journals, articles, and current data obtained from the World Bank and various other online sources. The issues to date in Afghanistan will be located and highlighted. A detailed examination of trade patterns, volume of trade, and the nature of the cargo will be carried out. From these patterns, an assessment will be made on the corresponding change in trade from the current patterns to a more efficient logistics network. This will be a hypothetical modeling scenario. A similar study will be made regarding Pakistan, focusing on trade at the Arabian Sea ports and the nature of the cargo destined for Afghanistan.
This proposal outlines a multi-staged research design that will be undertaken to provide supporting evidence for creating a multi-modal logistics network connecting Arabian Sea ports to landlocked countries in Central Asia. The purpose of the proposed research design is to gain an understanding of the current logistics network in Afghanistan, and the current issues with using the sea ports in Pakistan. Following on from this, an assessment of the related transport and transport corridors will be made. From this data, an optimal multi-modal logistics network will be devised.
3.2 Data Collection
The second form of primary data collection involved travel to specific locations on key logistics transport routes to collect and compile data on infrastructure and transport services. This included, from Arabian Sea ports, visits to major cities in Pakistan and Afghanistan and an overland trip to Uzbekistan. The purpose was to observe and record existing facilities and conditions of transport networks on various modes. In particular, noting locations and conditions of intermodal transfer points, different modes of transport available and used, and the types of services and capacities. This primary data was supported by the collection of a large array of secondary data to fill in any gaps and to confirm and cross-reference information, thereby ensuring its accuracy.
Field research sought to obtain primary first-hand data and has included extensive interviewing of senior executives from shipping lines, freight forwarders, 3PLs, port authorities, coastal and transport ministries, and relevant industry and trade associations. These interviews were semi-structured, enabling the interviewer to cover specific topics and questions, ensuring usefulness of the data, while also allowing the interviewee freedom to express ideas and perspectives deemed important within the scope of this research. These interviews have provided valuable insights and perspectives on the current situation and challenges faced by those directly involved and responsible for logistics movements to and from the Arabian Sea regions. They also helped in understanding how the changes in geopolitical tensions, government policies, and economic conditions in Central Asia and the Arabian Sea region are affecting logistics activities.
Provide a brief overview of the sources of data and how they were utilized to assess the current situation of multimodal logistics networks in the Arabian Sea regions at various stages in this complex research process. In particular, provide clear statements of how the field work was conducted and the manner in which qualitative and quantitative data was used to construct a comprehensive understanding of the current situation.
3.3 Data Analysis
The data collected from both primary and secondary sources was analyzed using various techniques. The first step was to understand the present conditions of Arabian Sea ports and identify the reasons for the present levels of traffic through these ports. This was done by comparing the data obtained from various sources. Statistical comparisons were made to understand the relationships between the different variables. For example, the trends in imports to Pakistan were analyzed in relation to the cargo traffic at various Arabian Sea ports. This was done to identify which ports have potential for future growth and which are in decline. The data was also used to identify the types of cargo being handled at each port and the various destinations of this cargo. This was done to build up a clear picture of the types of traffic that pass through Arabian Sea ports. Once the present situation had been highlighted, the focus shifted to identifying the potential future cargo flows. This was done in relation to the landlocked countries in Central Asia. Various regression models were used to calculate potential cargo flows between these countries and the Arabian Sea. In building these models, independent variables such as economic growth in the Central Asian countries and the prices of various commodities were used to determine their effect on the dependent variable, being the amount of cargo. These analyses were purely to establish theoretical concepts and hence very large margins for error were used in coming to these conclusions. This was done in consideration of the dynamic nature of the future economic situation in these countries. It was important to understand future cargo flows so that a clear picture of infrastructure needs could be developed. This would provide a link between the present situation and the long-term future of Arabian Sea ports.
4. Optimization Strategies
Optimization strategies involve improving efficiency in the system so that the desired goals of all actors can be met in a more effective manner. For a network design problem, such strategies may involve improving the software used to solve the problem, changing the way decisions are made, and improving the quality and specificity of data used in the decision-making process. All these are relevant to the development of more effective methods of solving the complex optimization problems associated with network design. For this reason, the work of European rail firms within the Hermes project is relevant. These firms have developed a rail optimization decision support system which aims to establish “freight logistics as the intelligent alternative to lorry transport”. The system uses an “intelligent itinerary search algorithm” to provide solutions which are close to the global optimum for freight customers. Although only applied to western European freight networks, the system is of a similar nature to that which would be required to establish intermodal services between the Arabian Sea and Central Asia. An additional infrastructure development strategy concerning the physical construction of the network may be applied to a global scope for a problem with many similarities.
4.1 Infrastructure Development
Upgrade and development of infrastructure is pivotal for improving transport services. There are two main aspects to infrastructure upgrade which are hard and soft infrastructure. Hard infrastructure includes physical infrastructure such as buildings or bridges, while soft infrastructure includes services such as transport and logistics operations or customs and clearance procedures. Whilst hard infrastructure is critical, cost control is more flexible at 1.5-2 times the transport cost hence a focus of soft infrastructure improvements can provide more cost efficient results. Given the current situation, there is a lack of direct hard infrastructure links between the Arabian Sea and Central Asia. This makes cost efficient transport and logistics solutions very difficult as longer shipping distances to major ports impact competitiveness of overland transport options. With Central Asia also lacking access to the sea in comparison to other landlocked regions, development of hard infrastructure linking Arabian Sea ports or existing sea ports to inland locations in Central Asia is a strategy that has great potential. An example of feasibility is the carrying out of the China Pakistan Economic Corridor which includes development of roads and rail infrastructure linking China to the Pakistani ports of Gwadar and Karachi. This enhances the potential for cost efficient transport options connecting these ports to inland locations in Pakistan and the North of Afghanistan. The current situation also places restrictions on vehicle and transport mode changes which is a result of poor infrastructure. The ability to utilize efficient transhipment or freight interchanges between differing transport modes requires hard infrastructure in place at specific transport nodes. An example would be direct rail links and freight facilities located at ports or availability of suitable road transport at customs and border crossing points for switching between countries. With the project to optimize logistics network being a complex and large scale operation, the current focus on Afghanistan is worth mentioning. Afghanistan has a history of conflict and political instability which has left hard infrastructure in poor condition. Development of transport and logistics is a key factor in progress and growth of the nation, and a core strategy of the current Afghan government is to make the country a regional transit hub. Afghanistan is a unique location as it is a landlocked country with no direct access to sea but is within close proximity to the Arabian Sea region. The current primary mode of transport for goods from Pakistan to Afghanistan is via road transport through the treacherous Khyber Pass in the Northwest, or via air transport. Though there are many safety and security concerns, recent technology integration has been established with customs and clearance procedures linked to online systems to prevent corruption and ensure smooth clearance of goods at border crossings; an area for potential research in collaboration and coordination strategies. An improved security situation and infrastructure development involving a freight route to the Gwadar port or a Peshawar-Kabul direct road link would greatly improve the efficiency and safety of goods transport into Afghanistan which has been the most difficult segment of the Afghan-Pakistan trade. Recommended strategies for this situation will be discussed in further detail in section 5.
4.2 Technology Integration
Advances in information technology and communication have made it possible for logistics-intensive companies to constantly improve the efficiency of their operations. In general, management-intensive companies can gain competitive advantages through the application of technological solutions in areas such as information management, workflow organization, customer relationship, and performance monitoring. In the case of the transportation and logistics infrastructure, available technology has become more sophisticated and cost-effective in recent years, and there are almost limitless possibilities for improvements in efficiency. Technologies such as tracking and tracing, electronic commerce, electronic data interchange (EDI), and intermodal transportation equipment advancements can help to make the transportation of goods more efficient. In the proposed network, the application of tracking and tracing technology can be particularly useful. This technology has traditionally been associated with highly priced consumer goods such as electronics and jewelry; however, the cost of RFID and GPS technologies has been steadily decreasing and it is now feasible for use with most consumer goods. By making use of RFID or GPS tags, suppliers can monitor the exact locations of their goods at any given time. This information can be extremely useful in situations where there are delays or disruptions and immediate alternative action must be planned. Tracking and tracing technology is also highly complementary to intermodal transportation. With the ability to monitor the location of the goods and the delivery performance of different carriers, suppliers can make informed decisions on the best combinations of transportation modes. It is concluded that advances in information technology and communication have made the world smaller and have provided a wealth of tools for improving supply chain operations. High transportation costs can be reduced by building near seamless transport networks that capitalize on technology to make the transportation of goods more efficient.
4.3 Collaboration and Coordination
The coordination is aimed at achieving optimal resource utilization with minimum transaction costs. In the context of the sea-land interface, efficient coordination can result in an increase in cargo volume for the landlocked country with the same shipping line cost, as has been modeled by second leg shipping. The dual cycling can result in a reduction of inland transportation costs for the importer. Efficient coordination can also bring in economies of scale and economies of distance, resulting in overall cost savings for the end customer.
At the international level, there is a need for a partnership between the public and private sectors of the countries involved. The public sector has a crucial role in framing trade policies, providing a level playing field to the operators of both partner countries, and removing any trade barriers. The private sector operators can form joint ventures and strategic alliances to exploit business opportunities. A very encouraging development is the public-private partnership (PPP), which has emerged as a successful model for the development of infrastructure projects. The joint venture of Hutchison Port Holdings and Karachi Port Trust for the operation of Karachi International Container Terminal is a case to study. This has the benefit of private sector management expertise, which is pooled with the public sector regulation and development. The companies involved in providing technology solutions must develop inter-firm linkages and combine their software platforms to provide integrated solutions. An example can be what G-Log and Lucent Technologies are doing to provide TMS solutions.
For ensuring successful operation of a multi-modal logistics network, coordination amongst the stakeholders holds prime importance. In the case of Arabian Sea Ports and their hinterland, the requirement of coordination is more pronounced due to the involvement of multiple handling agencies such as customs, navy, port authorities, and various transport operators. To achieve seamless coordination, it is essential to form a nodal body for each transport mode involving the participation of all agencies. These nodal bodies can then coordinate at the national level through federal institutions.