Shipping lines have raised the freight charges by up to ten times due to lockdowns and restrictions of COVID-19 in major economies that ultimately slowed down the trade of various commodities in the past few months.
According to the industry sources, the freight charges have increased from $400 per container to $2,000 per 20-feet container from Pakistan to Shanghai, a major port hub. The charges even surged to $4,000 per container on the shipment to the US and its adjacent markets from Pakistan.
The containers are not available as per demand, which slowed down the logistics process of countries across the world, including Pakistan. Therefore, the trade pace of imports and exportable products is affected by the schedule.
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Sources in the industry informed that due to the lockdown in Europe and North America, the return of containers to China and other Far Eastern countries was getting delayed, resulting in shortages of boxes and price hikes on charges.
Various ports considered trans-shipment hubs are witnessing congestion of containers, resulting in delays in the supplies of goods to exporters and importers of different countries. In Pakistan, the containers from the Far East and China used to arrive in 19 to 24 days, but now they are facing a delay of seven to 15 days.
The higher charges of logistics also increase the cost of imports of various finished goods and raw materials, which are being passed on to the end-users. For instance, the recent hike in car prices is linked with the higher logistics cost to import major parts from various countries.
There is a shortage of containers in China for export purposes, and all shipping lines are repositioning their empty containers in the region to China. This has hiked the freight rates. Pakistan’s exports were up in December, meaning there is no shortage of the containers but only re-pricing of services because of the shortage in China, said Asim Siddiqui, Chairman All Pakistan Shipping Association (APSA).
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The congestion at various hubs of trade began in November and shows no sign of abating so far. However, the stakeholders forecast the situation may improve from March onwards.
The supplies of various imported items and exportable products from Pakistan may see an adverse impact depending on the situation of the COVID-19 pandemic that could ultimately cause a huge dent in the national exchequer.
THIS HAPPEN ON EACH YEAR FROM NOV TO FEB
NORMALLY CHARGING USD 300* PER 20 CONVERT INTO 2500* PER 20FT
STILL PNSC, PAKISTAN GOVERTNEMTN NEVER THINKING ABOUT TO LAUNCH OWN VESSEL SERVICE ATLEAST FROM CHINA.