Transportation Cost of Container Cargo Increases by 700% in Pakistan

The transportation cost of containerized cargo across the globe has increased by up to 700 percent, Express Tribune reported. The same has taken place in Pakistan as well.

This is being attributed to abnormal growth in imports as the global economies reopen following COVID-19 pandemic-related lockdowns.

The increase in international freight charges for the sea, rail, and air routes has offset the positive impact of incentives provided by the government for some imports, which may also lead to imported inflation in the country.

Pakistan International Freight Forwarders Association’s Former Chairman and CEO of Agility Pakistan, Malik Moin, told media that freight charges for cargo in a 20-feet container arriving from China to Pakistan increased to $2,000-$3,000, as compared to around $700 in June 2020. Further adding, “I had not seen such a big jump in rates over the past 25-30 years throughout the world.”

Pakistan mainly imported cargo through the Far Eastern countries like Thailand, China, Hong Kong, and Singapore, he mentioned.

Pakistan Ships Agents Association Chairman, Mohammed Rajpar, said that the pandemic had badly disrupted the cargo supply chain around the world due to which the containers remained stuck in several countries owing to the lockdowns.

He said, “The situation widened the gap between demand and supply (of imported cargo). The gap was filled by price equalizer.”

The situation emerged post-COVID due to imbalances in the number of ships and the number of containers for global trade, he added.

He said that while the government cannot do anything on its own for now, there is a need to increase the shipping companies in the long run so at times like this the government may have the capability to intervene.

Pakistan Business Council CEO, Ehsan Malik, said that even though Pakistan is not the only country affected by this, considering that the demand for textiles from Pakistan is higher than other countries, delays in shipments can result in lost opportunity if others step up production as COVID subsides.



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