Key Takeaways
- Shipping costs from Pakistan to the US have increased by over 200%.
- The surge is attributed to the Iran war and increased insurance and fuel costs.
- Exporter Ismail Suttar urges government to intervene to protect competitiveness.
Shipping costs for Pakistani exporters to the United States have skyrocketed by more than 200%, according to Ismail Suttar, founding chairman of the Salt Manufacturers Association of Pakistan (SMAP).
A container shipment from Karachi to New York that once cost around $2,000 is now being quoted at $8,000 to $9,000, significantly impacting the competitiveness of Pakistani products in the US market.
The increase is particularly pronounced on the Karachi-Jebel Ali route, where freight charges that previously stood at $100-200 have risen to around $4,000-5,000, even as vessel availability has declined.
Suttar warns that the added cost could undermine the competitiveness of Pakistani products, especially when compared to competitors like Vietnam, where a similar shipment currently costs around $3,000-4,000.
He points out that the cost differential is around $5,000 for Pakistani exporters, putting them at a clear disadvantage in international markets.
Ismail Suttar, founding chairman of SMAP, urges the government to take immediate notice of the situation and formulate an emergency strategy to contain the impact of rising freight charges on exporters.
He calls for the immediate formation of an inter-ministerial committee comprising exporters, shipping companies, and relevant government agencies to assess the extraordinary rise in freight charges and devise measures to provide relief.
Failure to intervene promptly, Suttar warns, could lead to a decline in export orders, further pressure on foreign exchange earnings, and weaken Pakistan’s position in international markets.
Suttar also highlights Pakistan’s lack of an effective national shipping carrier and an adequate containerised cargo fleet as a structural disadvantage, noting that countries like China and Korea have national carriers that support their trade through periods of international disruption.
Shipping rates have increased globally, but the increase on some routes from Pakistan is disproportionately high.
Ismail Suttar, Founding chairman of the Salt Manufacturers Association of Pakistan (SMAP)
The government needs to move from a reactive approach to proactive policy-making and continuously monitor changes in global shipping routes, freight rates and supply chains.
Ismail Suttar, Founding chairman of the Salt Manufacturers Association of Pakistan (SMAP)
