Supply Chain and Project Management Center

Department: Supply Chain Management

University of the Punjab, Lahore

Submitted by

Abdul Qadeer MS SCM 16S23

Session: 2023-2025

Impact of Climate change on logistics system of South Punjab, Pakistan

A report submitted in Partial fulfillment of the requirement for the award of the
degree of Masters (MS) in Supply Chain Management.
 Declaration

We are writing to formally declare that the report titled " Impact of Climate change on
logistics system of South Punjab, Pakistan" is entirely based on my original work. All the
information, analysis, and findings presented in the report are the result of my own research and
study. I have appropriately cited and referenced any external sources used in accordance with
academic standards.

Furthermore, we confirm that this report has not been previously submitted for any other degree
or institution. It is a unique contribution to the field of study and has not been replicated or
reproduced in any form.
 Abstract
Road transport is one of the main contributors to increasing greenhouse gas (GHG) emissions,
consequently aggravating global warming, but it is also one of the sectors that most suffer from
climate change, which causes extreme weather events. This study highlights the vulnerability of
the logistics system in the region due to floods, extreme weather events, and poor
infrastructure. It emphasizes the need for adaptation strategies and policy recommendations to
enhance resilience. The study aims to analyze historical climate data, assess the current state of
the logistics system, and identify potential impacts of climate change. The research relies on
reports from reputable sources and aims to provide valuable insights and recommendations for
stakeholders. It explains the issues South Punjab and people of this region facing due to the
climate change and the lack of logistics system. It shows the connection between the Climate
change and the worse condition of the South Punjab. The method use for this research is simply
a study of past research material, government of Pakistan reports, Word Bank reports and the
other national and international published articles.

Keywords: flood; Flood risk management; Transportation Infrastructure; Logistics; Climate Change,
 Introduction
Climate change is a global phenomenon that poses significant challenges to various sectors,
including the logistics system. The logistics system plays a crucial role in facilitating the
movement of goods and services, ensuring the smooth functioning of supply chains. However,
the impact of climate change on the logistics system, particularly in vulnerable regions such as
Southern Punjab remains a topic of concern and requires further investigation. Floods are the
main danger in this region. Flooding is most common thing happens ever mostly every year due
to its geographical location. Two main rivers pass through this region, Chenab and Sindh.
Theses rivers are main source of water for this area and cause of destruction as well.

Floods, as one of the most frequent types of natural disasters, have had devastating
consequences globally. According to the World Health Organization (WHO, 2022), floods have
affected over 2 billion people between 1998 and 2017. Pakistan, in particular, has experienced
the destructive force of floods, with significant implications for its logistics system. The floods in
2010, 2011, and 2022 affected millions of people, resulting in thousands of deaths and causing
extensive damage to infrastructure, including roads, railways, forests, and agricultural land (A
framework for multi-sensor satellite data to evaluate crop production losses: the case study of
2022 Pakistan floods).

The main reason behind these floods is climate change. Due to the change in climate the
temperature rises and the glaciers melt and monsoon rainfall add its part to destroy the vast
are of agriculture, livestock, Warehouses, Logistics infrastructure, houses and death of
thousands of people as well. Government of Pakistan and provincial government have been
failed to make a proper plan to save this area from the natural disasters.

The increasing priority given to climate change at the global level, by governments, businesses,
and communities, reflects a growing understanding of its wide-ranging implications. As
highlighted by Posas (2011), climate change affects trade, security, the economy, ecosystems,
and the well-being of humans and other species. Moreover, there is a consensus that low-
income countries, such as Pakistan, are more vulnerable to current climate variability and
future climate change compared to wealthier nations (World Bank, 2013).
In August 2022, Pakistan experienced one of the most severe floods in its history, triggered by
exceptionally high monsoon rainfall. This catastrophic event affected approximately 33 million
people across the country, leading to significant agricultural losses in the productive Indus
plains and exacerbating the risk of food insecurity (A framework for multi-sensor satellite data
to evaluate crop production losses: the case study of 2022 Pakistan floods).

The logistics system in this area is also very poor. Most of its population lives in rural areas and
their profession is farming. The roads are very pathetic and unpaved. Pakistan Agricultural
Storage & Services Corporation Limited (PASSCO) is leading grain procurement and storage
agency in south Punjab. But the main concern is that their storage rooms are also not save for
grains. In 2010 and 2022 flood their storage house were destroyed which caused them severe
loss.

Lack of logistics system in south Punjab is due to lack of Industry. There is less road density
which cause the high freights. It affects the farmers and small businesses as well. As this area is
away from main industrial hub of Pakistan so, people have to bear more cost of logistics and
transportation of seeds, fertilizers, pesticides, drugs, garments and grocery. This issue causes
the poverty of region and therefore investors and even government show no intentions to
improve the logistics infrastructure of South Punjab. Even if government do so the floods will
destroy this infrastructure again and situation will be worse again, The only solution of all this
issue is to make effort to control climate change by growing the forests and reducing the air
pollution.

Geographic concentration or agglomeration of industries is one of the most striking features of

economic activity in developed and developing countries including Pakistan. A vast empirical
literature from developed countries suggests that firms and workers are unevenly distributed
across spatial units; they agglomerate in some regions more than others [e.g., Ellison and Glaser
(1997), Maurel and Sedilot (1999), Alonso-Villar et al. (2004), Bertinelli and Decrop (2005)].
This research paper aims to investigate the impact of climate change on the logistics system of
Southern Punjab. By analyzing the available literature and reports from reputable sources,
including the United Nations Organization (UNO), World Bank, past research materials,
Pakistan government reports, and Punjab government reports, this study seeks to provide
insights into the challenges and potential solutions for enhancing the resilience of the logistics
system in the face of climate change. The findings of this research will contribute to the existing
knowledge base and provide valuable recommendations for policymakers, researchers, and
stakeholders involved in the logistics sector in Southern Punjab, Pakistan.

Problem Statement

The logistics system plays a critical role in supporting economic activities and facilitating trade
in South Punjab. However, the region is increasingly experiencing the impacts of climate change
including rising temperatures, changing precipitation patterns, and extreme weather events.
These climate-related changes pose significant challenges to the logistics system, affecting
transportation routes, infrastructure, and supply chain operations. Therefore, it is essential to
investigate and understand the specific impacts of climate change on the logistics system in
South Punjab to identify vulnerabilities, assess risks, and develop adaptive strategies that can
enhance the resilience and sustainability of the logistics sector in the face of a changing climate.
 Objectives

The main objectives of this research are the followings.

1. To analyze the historical climate data of South Punjab, and identify trends and patterns in
temperature, rainfall, and extreme weather events.
2. To assess the current state of the logistics system in South Punjab, including transportation
infrastructure, supply chain networks, and distribution centers.
3. To investigate the potential impacts of climate change on the logistics system in South
Punjab, such as increased flooding, heatwaves, or disruptions in transportation due to extreme
weather events.
4. To evaluate the vulnerability of the logistics system in South Punjab to climate change,
considering factors such as infrastructure resilience, supply chain disruptions, and economic
impacts.
5. To identify adaptation strategies and measures that can enhance the resilience of the logistics
system in South Punjab, Pakistan, to climate change impacts, such as improved infrastructure
planning, risk management, and alternative transportation routes.
6. To propose policy recommendations and guidelines for policymakers and stakeholders to
mitigate the negative impacts of climate change on the logistics system in South Punjab,
Pakistan, and promote sustainable and resilient logistics practices.

These objectives aim to investigate the potential effects of climate change on the logistics
system in South Punjab, Pakistan, and provide valuable insights and recommendations for
policymakers, researchers, and stakeholders to address and mitigate these impacts effectively.

Scope:
1. The research will focus on the logistics system of South Punjab, Pakistan, including
transportation infrastructure, supply chain networks, and distribution centers.
2. The study will analyze the historical climate data of South Punjab, Pakistan, and identify
trends and patterns in temperature, rainfall, and extreme weather events.
3. The research will assess the potential impacts of climate change on the logistics system in
South Punjab, Pakistan, such as increased flooding, heatwaves, or disruptions in transportation
due to extreme weather events.
4. The study will evaluate the vulnerability of the logistics system in South Punjab to climate
change, considering factors such as infrastructure resilience, supply chain disruptions, and
economic impacts.
5. The research will identify adaptation strategies and measures that can enhance the resilience
of the logistics system in South Punjab, Pakistan, to climate change impacts, such as improved
infrastructure planning, risk management, and alternative transportation routes.

Limitations:
1. The study will be limited to the logistics system of South Punjab, Pakistan, and may not be
generalizable to other regions or countries.
2. The research will rely on secondary data sources, such as climate data and logistics reports,
which may have limitations in terms of accuracy and completeness.
3. The study may face challenges in obtaining data on the logistics system in South Punjab,
Pakistan, due to limited availability and accessibility of data.
4. The research may be limited by the availability of resources, such as funding and time, which
may impact the depth and breadth of the analysis.
5. The study may be limited by the expertise and knowledge of the researchers, particularly in
terms of climate science and logistics management.
 Literature Review

Pakistan is listed in the top vulnerable countries to climate change, which experiencing catastrophic
climate extreme events and these extreme events are predicted to increase in frequency, intensity and
duration. Climate change scenario is alarming the existence of climate change related risks in Pakistan
including sea level increase, glacial depletion, high average temperatures, floods, high frequency
droughts and half of the country's population is at risk (World Bank, 2013).

Due to this extreme climate change in this region this cause the extreme loss to the general people and
Government of Pakistan almost every year from 1957. As per vulnerability index, Pakistan is ranked
12th at global scale with approximately 4.5 billion dollars anticipated economic losses (Ahmed and
Schmitz, 2015). This Climate change is the main cause of flooding. Floods are not only the problem of
Pakistan. It is the one of the major threats South Asia is facing at this time. Flood disasters have
increased over the last three decades in South Asia due to factors such as climate change,
environmental degradation, and increasing population growth (Shrestha and Takara, 2008)

Flooding has its negative impacts, and as a result of negligence of the government, it becomes more
damaging in its after-effects (Khan and Schwoebel, 2010). Flood hazard management is a process to
establish a system and the perfection in this structure requires new techniques (Plate, 2002).
Corruption, business interests and lack of political will are the major hurdles in flood restoration
process (NDRMF, 2007). There is no implementation of any scheme through which floods can be
controlled in a specific region by flood related organisations. That is the reason, in hazard-prone
regions; people are suspicious about their regional future (Tariq and Giesen, 2011).

The other impact of this climate change is on the agriculture system. Due to the change in climate the
temperature of this region is increase with the passage of time. This increase in temperature causes
the reduction of agriculture growth and land fertility. Cotton production is impacted by climate change
across crop's growth cycle. Even 1 °C rise in temperature from normal at various crop growth stages
can impact the crop yield. In Punjab1o C increase in temperature during the sowing period will result
in increased yield of 1.65% while same 1 °C rise in temperature during vegetative and flowering-
fruiting stages will result in yield reduction by 24.14% (Raza and Ahmad, 2015)

Logistics system is one of the most affected sectors from the climate change in South Punjab. The
transportation system in South Punjab mainly depends upon roads due to lack of railway lines and any
other way of transportation. These roads get destructed every year with the floods and extreme
temperature in summer and this creates the difficulty for the transportation sector. Although the
transport sector is functional, its inefficiencies with long waiting and traveling times, high costs, and
poor reliability hinder the country’s export competitiveness and internal trade. Moreover, these
inefficiencies increase the cost of doing business in Pakistan and limit the country’s ability to integrate
into global supply chains, which require just-in-time delivery (World Bank 2011)

This situation creates the difficulties for the investors and logistics companies. Lack of government
interest in this sector is also the cause of zero growth in this sector. A number of reasons explain
Pakistan’s worsening indicators in transport and logistics. Indications that the GOP may restore
public-sector regulation of the freight forwarding industry (after allowing professional self-regulation
only in 2006–07) has shaken confidence in a bright and emerging industry, resulting in an inability to
focus on self-improvement and service delivery. The lack of progress on financial services available to
this formal sector activity has also thwarted modernization in freight forwarding, trucking, and
railway services. (Greening Growth in Pakistan through Transport Sector,2013)

Data from the Punjab Highway Department present a sense of spatial disparities in road infrastructure
and its links to agglomeration. Road density varies greatly across districts. The districts in South
Punjab have less road density than the districts in Northern Punjab. The Sialkot district in north
Punjab (which houses major export-oriented firms, such as sporting and surgical instruments, and is
the third largest economic center after Lahore and Faisalabad in Punjab) has relatively better road
density than south Punjab. In addition, road density has fluctuated over time in Pakistan: some South
districts, such as Rajanpur, Bhakkar, Layyah, D.G. Khan, and Rahim Yar Khan, which had relative road
density of less than 40 percent of Lahore districts in 1992–03, maintained their relative road density
in 2005–06. In contrast, districts such as Faisalabad, Rawalpindi, and Sargodha improved their relative
shares of road density from around 70 percent of Lahore to more than 80 percent, primarily due to the
construction of a 400 kilometer motorway and other ancillary roads (figure 3.1).5 Relative road
density in the districts of Jhang, Chakwal, Muzaffargarh, and Mianwali substantially increased during
this 13-year period. Sialkot, Gujranwala, Sahiwal, Multan, and Gujarat districts are examples of
districts that have experienced a large decline in their relative road density. Sialkot had the second
highest road density after Lahore in 1992–93, with road density equal to 90 percent of Lahore’s.
However, by 2005–06, Sialkot’s road density had decreased to below 50 percent of Lahore’s. (Greening
Growth in Pakistan through Transport Sector,2013)

An econometric analysis completed by Lahore University of Management Sciences (LUMS,2011) finds

that there is a strong negative correlation between road density across districts and poverty incidence.
This is also a major reason of poverty in South Punjab and this poverty is the major cause in failure of
large businesses in this region. Ease of business doing is not in this region so people do not take
interest in businesses and this lead to the weak infrastructure of logistics in South Punjab.
Apart from physical infrastructure, the analysis found that access to social infrastructure is highly
concentrated in the metropolitan areas. Moreover, the gaps between leading and lagging districts are
increasing over time. Empirical results of the (LUMS ,2011).

So, In the following graph we can see clearly districts with high density of roads are included in
developed districts. The districts which have low density are struck into poverty. This graph
completely shows the relationship and this study also explains this in detail.
Fig 2: Spatial inequality in road density in Punjab, 2005-06

Source: The methodology used to map district-level employment shares in Pakistan’s manufacturing
sector can be found in the strategic environmental, poverty, and social assessment consultant report
prepared by LUMS (2011) for the World Bank.
A consistent time-series data on road density at the district level is not available from any published
source. Part of the problem is that more than one dozen government institutions at the federal,
provincial, district and municipal government level, besides armed forces and stateowned
corporations, are involved in construction and maintenance of road infrastructure in the country that
makes the data collection exercise extremely cumbersome.

Market access is determined by the ease of connectivity with the market centers in spatial vicinity of
the firm, which in turn depends on the availability of good road infrastructure, firm’s 5 distance from
the market, size of the market and the availability of quality transport networks. Absence of all or
some of these factors limits the extent of the market for a firm because the firm would be unable to
connect to a wider market area, i.e., other cities and districts, other provinces or the rest of the world.
Therefore, spatial inequality in road infrastructure may constrain market efficiency and promote
market failures by creating factor scarcities and distort factor prices, which in turn may prevent these
spatial units to specialize in production by comparative advantage or dynamic comparative advantage.
The recent literature also suggests that improvements in roads at the regional level can significantly
contribute to the pursuit of socially inclusive growth [e.g., Khandker et al. (2009), Jacoby and Minten
(2009)]
 Methodology
This research paper employs a literature review methodology to investigate the impact of
climate change on the logistics system of South Punjab. The literature review is based on
reports from reputable sources, including the United Nations Organization (UNO), World Bank,
past research materials, Pakistan government reports, and Punjab government reports. This
approach allows for a comprehensive analysis of existing knowledge and insights related to the
research topic.

Systematic Search:
A systematic search was conducted on various online databases, including Google Scholar, UNO,
World Bank, Pakistan government websites, and Punjab government websites. The search was
performed using the identified keywords and search terms to retrieve relevant reports and
studies.

Screening and Selection:

The search results were screened to identify reports and studies that met the inclusion criteria.
These criteria included being published by reputable sources and focusing on the impact of
climate change on logistics systems in South Punjab. Reports and studies that did not meet
these criteria were excluded.

Data Extraction and Analysis:

Data from the selected reports and studies were extracted and analyzed. Key findings,
recommendations, and limitations were identified and synthesized to gain a comprehensive
understanding of the impact of climate change on the logistics system in South Punjab.

Conclusions and Recommendations:

Based on the synthesized findings, conclusions were drawn regarding the impact of climate
change on the logistics system of South Punjab. Recommendations were also formulated to
enhance the resilience and sustainability of the logistics system in the face of climate change.

By employing this literature review methodology, this research paper aims to provide valuable
insights and recommendations for policymakers, researchers, and stakeholders involved in the
logistics sector in South Punjab. The reliance on reports from UNO, World Bank, past research
materials, Pakistan government reports, and Punjab government reports ensures a robust
analysis of existing knowledge and expertise in the field.
 Result and Discussions
Firstly we find that the climate change in the world is impacting the whole world
specifically South Asia. This Climate change is pushing the South Punjab into a flood area
and lack of business site. Lack of ease of business doing is the major cause of bad
infrastructure of logistics in this region. Above all issues leads to the poverty in this site.
We find that the economic geography does matter in Pakistan. With few exceptions, the
most highly concentrated districts in large-scale manufacturing employment are clustered
around metropolitan cities of Karachi and Lahore, and their surrounding districts.
However, despite many empirical studies on convergence and divergence in many
countries, we cannot offer a concrete guide on how the policy makers in Pakistan can move
to achieve the objective of faster convergence. Nor do the existing literature offer any
benchmarks of remoteness below which the chances of viable development activity
disappear.

To avoid the hazardous consequences, the following recommendations are made:

i. Despite the environmental aspects, infrastructural insufficiency is the key factor of

inundations in Pakistan. System from all the aspects needs to be developed and the
perfection is required in structural reassessment. Flood hazard management needs
connection between tasks and actions.
ii. Efficiency of the government in coping with disaster and coordination among its
responsible organizations can help to reduce the effects of menace.
iii. iii. Infrastructure made by the federal government must be revised and ought to be
developed according to the consequences of 2010 and afterwards floods.
iv. For the sake of minimizing the consequences, early warning system must be upgraded.
v. Proper budgeting and training can reduce the effect of catastrophe.
vi. Water reservoirs should be increased in numbers as well as existing reservoirs and dykes
are needed to be renovated. vii. It has already been proved that the process of evacuation
is inappropriate and full of threats. In this regard, federal government has to provide a
proper guideline to the public through provincial Disaster Management Authorities and
local authorities. And during the inundations, with the private collaboration government
has to provide the facilities to the affected people.
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