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Delayed Shipments and Rising Freight Prices Will Disrupt Automobile Parts Supply: Former Chairman PAMA

Former Chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers Mashood Ali Khan has said that delayed shipments and hike in freight charges worldwide will impact Pakistan’s automobile spare parts.

He spoke with Express Tribune saying,

If we cannot control these basic parameters, then shortages are inevitable, and shipping expenses, which are often disregarded for having little influence on inflation, are now becoming the center of attention for economists.

Khan said that the industries are working to control the price hikes by reducing their profit margins, and revealed that some companies have stopped exporting to certain countries while importers are seeking raw materials closer to home.

Regarding the costs and deliveries of vehicle parts, the chairman said that it took 25 days for a shipment from China to reach Pakistan prior to the pandemic, but shipments now take almost 60 days.

“The current cost of vehicle parts and the time is taken for their delivery have increased. A 40 feet container used to cost around $2,000, but now it is priced at $11,000,” he explained.

Khan added that a shipment from Thailand to Pakistan would normally take 12 days, but now regularly takes 35 days. Similarly, a container from Indonesia used to reach Pakistan in 35 days, but takes 50 days in the current situation.

He stated that the prices of these containers have also risen from $3,200 per container to almost $11,000.

“This is just a small glimpse of the bottlenecks in supply chains that industries in Pakistan are facing. The biggest dilemma is that the entrepreneurs cannot forecast what will happen in the next six months,” he remarked.

Commenting on the situation Arsalan Hanif, an Investment Analyst at Arif Habib Ltd., said that the cost of doing business right now is turbulent and difficult to sustain.

He added that the price hike for automobile parts will be unavoidable if the high freight charges continue.

Similarly, the Chairman of the Association of Pakistan Motorcycle Assembles, Sabir Shaikh, stated that the disruption in the supply chain is a huge problem for small vendors in the local auto industry.



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