Degree

Master of Business Administration

Faculty / School

School of Business Studies (SBS)

Advisor

Dr. Rameez Khalid, Assistant Professor, Department of Management

Committee Member 1

Dr. Rameez Khalid Assistant Professor - Director CEE Department of Management Institute of Business Administration (IBA), Karachi

Project Type

MBA Research Project

Abstract / Summary

The primary aim of this study is to provide useful insights on Pakistan's Transport and Logistics industry, particularly the road transport sector to Agility Logistics Pakistan which will help the company in implementing one of its crucial projects for reducing the lead time between Pakistan and Turkey via road transport i.e., implementation of TIR system. The ultimate objective is to help the company decide whether to go for this project or not based on the results of the demand, technical, and financial feasibilities documented by us. This study was conducted from October 2020 to May 2021, followed by documentation and compilation of data.

We started off with secondary research to lay the foundation of our study, subsequently to build upon our research objectives. After concluding our secondary research, we developed our methodology based on our findings that suggested qualitative tools and Interviews were best fit for our study.

The first step towards our agenda was to determine whether the market is willing to opt for such a trade channel so preliminary demand feasibility was conducted which included analysis of historic import / export data of Pakistan provided by Trade Development Authority Pakistan & solicitating opinion of Professionals from the logistics industry, Government of Pakistan, and other key stakeholders whether the market will accept such a channel for trade or not.

Then a detailed study has been performed which served as a technical feasibility for determining the underlying rules and regulations to join TIR Carnet system. As it is an international convention, various rules and regulations were studied including but not limited to admission criteria for vehicle in TIR carnet, European Union trucking regulations, local trucking regulations, filling the TIR Carnet document and mapping possible routes from Pakistan to Turkey. A competitive analysis was carried whether the current system in place is or will be able take upon the said requirements for sustaining TIR operations. Lastly, a detailed financial feasibility was conducted to project the future cashflows of the company with respect to the budgeted investment and expenditures, which would be incurred by company with respect to this project. Forecasted Economic variables such as Inflation and GDP growth were obtained from Asian development bank website. To assess return and cash flows in comparison to the investment and riskiness of the project we used capital budgeting techniques i.e., NPV and IRR. We evaluated this project to be financially feasible due to forecasting of positive cashflow for next years that resulted in positive NPV and investment’s required rate of return (IRR) to be greater than company’s cost of capital (WACC).

The study focuses on understanding the market susceptibly and demand for TIR carnet operations, the current landscape of the logistic industry in Pakistan and how it will help in projecting the gains with the use of a TIR carnet. Moreover, the study further provides details on the current vehicle regulations that are being followed by road freight transporters in Pakistan and the international regulations that are required for TIR.

The key 'takeaway' from this study suggests Agility Logistics to invest in this project based on the results of demand feasibility, technical feasibility, and financial feasibility. However, it is also advised to the company to consider the evolving nature of the industry and changing economic conditions of the country as well.

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Available for download on Saturday, July 17, 2027

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