The cement industry has warned the government to halt its 100 percent axle load control regime (ALCR) on motorways and highways or risk incurring $2 billion in fuel costs.
In a letter to Caretaker Commerce Minister Gohar Ejaz, the All Pakistan Cement Manufacturer Association (APCMA) cited catastrophic ramifications for the economy if the axle load control regime remains in effect.
It said, “The implementation of the new axle load regime significantly reduces the lifting capacity of each truck (40 percent on 22-wheelers and 100 percent on 10-wheelers). This will undoubtedly contribute to a 50 percent to 60 percent increase in the freight costs, ultimately around $2 billion on fuel alone”.
APCMA said export activities will be adversely affected in two ways:
- Inland freight costs for export goods will rise, making Pakistani exports less competitive in the global market.
- A very large portion of exports are made in 20-foot containers, which are currently loaded with 28 tons per container. With the axle load restriction, this container will carry only 14 tons which shall double the sea freights, making Pakistani exports unviable.
The association warned that the loss in truck lifting capacity will culminate in a significant increase in freight expenses of ~$1.75 billion or 3.5 percent of total import costs. Moreover, it would double the cost of freight for both incoming raw materials and outgoing finished products. With the implementation of axle load, cement prices will go up by Rs. 40 to Rs. 50 per bag.
APCMA suggested the authorities to add a separate concrete lane on motorways and highways funded through an increase in toll tax on trucks.
The association’s request comes a few days after the government decided to enforce a 100 percent axle load control regime without relaxation from November 15, 2023.