KARACHI: Pakistani exporters on Tuesday complained about global supply chain disruption, saying their shipments were becoming more expensive due to the unavailability of containers which was leading to much higher freight charges.
The global supply chain industry is yet to recover from the impact of lockdowns imposed by countries since the emergence of the COVID-19 pandemic.
The container movement primarily become difficult due to the congestion at major ports in countries like the United States and China, resulting in significant rise in shipping costs worldwide.
“Exporters are worried since ships and containers are not available and freight cost has increased manifold,” Jawed Bilwani, chief coordinator of the Pakistan Hosiery Manufacturers and Exporters Association, told Arab News. “The containers that used to be only a phone call away are now made available after 20 days or more which delays our shipments. It also doubles our cost.”
Pakistani exporters said the availability of containers had become a major challenge to their businesses.
“The shipping line business is concentrated in a few hands, and these people are taking full advantage of the prevailing situation,” Khurram Mukhtar, patron-in-chief of the Pakistan Textile Exporters Association, said.
Local exporters informed freight charges had increased by 200 and 500 percent for 40- and 20-foot containers, respectively, since the emergence of the pandemic.
The cost of the 20-foot container from Karachi to the United States has increased from $5,157 to $7,685 since May, while its price for the month of October is quoted at $8,500.
Similarly, the 40-foot container price increased from $6,439 to $9,760 between May and September. The shipping line businesses plan to charge $10,800 for it starting next month.
Pakistani shipping experts believe the situation will not improve anytime soon and may take at least a year to get back to the pre-pandemic level.
“The pressure on global supply chain is mounting and there is no immediate solution in sight,” Mohammed A. Rajpar, chairman of the Pakistan Ships Agents Association, told Arab News.
He said that ships used to complete their full cycle from east to west and west to east in four to six weeks before the COVID-19 outbreak, but this duration went up to three to six months under the current circumstances.
He added that many shipping lines had also stopped their operations worldwide and scrapped their ships.
“New ships have been ordered and that will take at least two years to be delivered. New containers have also been ordered by companies,” Rajpar said.
Amid the aggravating situation, Pakistani exporters said the government should intervene by mobilizing the National Shipping Corporation, the national flag carrier and state-owned shipping company.
“All relevant ministries of the country must immediately intervene by taking necessary measures to safeguard the country’s exports,” the patron-in-chief of the Pakistan Textile Exporters Association said. “The government may dedicate its shipping corporation for export and import purposes for now.”
Pakistani exporters said they had been forced to pay demurrage — a charge applied to containers that are left at the port longer than their allotted free time — for the first time due to the ongoing shipping problems.