KARACHI: Pakistani exporters are facing a sharp increase in shipping costs to the United States, with freight rates on some routes rising by more than 200% amid disruptions caused by the Iran war.
Ismail Suttar, founding chairman of the Salt Manufacturers Association of Pakistan (SMAP), said on Monday that rising fuel costs, war-risk insurance and disrupted shipping routes have pushed freight charges significantly higher.
According to Suttar, the cost of shipping a container from Karachi to New York previously stood at around $2,000. Shipping companies are now quoting approximately $8,000 to $9,000 for the same route.
The sharp increase could make Pakistani products less competitive in the US market, particularly as exporters from other countries face comparatively lower freight costs.
Suttar said global freight rates have increased because of the regional conflict, but Pakistan has experienced a particularly significant rise on certain routes.
Freight costs on the Karachi-Jebel Ali route have also surged. Suttar said charges that previously ranged between $100 and $200 have now increased to around $4,000 to $5,000.
At the same time, the availability of vessels has declined significantly, creating a supply-demand imbalance and putting further upward pressure on freight rates.
Suttar compared Pakistan’s shipping costs with those faced by exporters in Vietnam.
A container shipped from Vietnam to New York currently costs approximately $3,000 to $4,000, while Pakistani exporters are paying around $8,000 to $9,000.
This creates a cost difference of roughly $5,000 per container, potentially putting Pakistani exporters at a major disadvantage when competing for international orders.
Suttar urged the government to develop an emergency strategy to address the rising shipping costs and protect exporters from the impact of global supply chain disruptions.
He also highlighted structural weaknesses in Pakistan’s shipping sector, including the absence of an effective national shipping carrier and an adequate containerised cargo fleet.
According to Suttar, countries such as China and South Korea use national carriers to support their exporters during international disruptions, while Pakistan lacks comparable capacity.
Suttar called for the formation of an inter-ministerial committee comprising exporters, shipping companies and relevant government agencies.
The proposed committee should investigate the sharp increase in freight rates and develop measures to provide relief to exporters.
He warned that continued high shipping costs could result in fewer export orders and put pressure on Pakistan’s foreign exchange earnings.
Suttar also urged authorities to continuously monitor international shipping routes, freight rates and supply chains so that Pakistan can respond more quickly to future disruptions.
