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.
Pakistani exporters complain of high freight charges amid global supply chain disruption
https://arab.news/zny7a
Pakistani exporters complain of high freight charges amid global supply chain disruption
- Global shipping charges have increased by about 500 percent since the outbreak of the coronavirus pandemic
- Pakistani exporters want the government to activate the National Shipping Corporation to address the situation
New PIA owner plans more GCC flights, lower airfares
- New management will focus on religious tourism to Makkah, Madinah and other sites to expand global reach
- Owner Arif Habib says airfares will be rationalized to make PIA flights affordable for low-income Pakistanis
KARACHI: Pakistan’s recently privatized national carrier, the Pakistan International Airlines (PIA), plans to increase its flights to the Gulf Cooperation Council (GCC) region as part of its post-privatization business strategy to achieve 7.5% annual revenue growth, its new owner said this week.
A Pakistani consortium, led by Arif Habib Group, clinched a 75% stake in PIA for Rs135 billion ($482 million) on Dec. 23 after a competitive bidding process, in a deal that valued the airline at Rs180 billion ($643 million).
The sale marked Pakistan’s most ambitious effort in decades to reform the debt-ridden airline that had accumulated over Rs784 billion ($2.8 billion) in losses. The government said it aimed to end decades of state-funded bailouts and support the airline’s revival.
In an exclusive interview with Arab News, Arif Habib, chairman of Arif Habib Group, shared that he aims to attract around 70 million Pakistanis, who travel annually via different airlines, by making airfares more affordable.
“That [GCC region] is our biggest market... We would definitely try to increase the frequency of flights, increase the number of planes there, and try to capture more market share in that area,” Habib told Arab News on Monday.
“So, there we see a lot of opportunity.”
The new management of PIA, which currently caters to 4 million passengers annually, aims to target religious tourism, which Habib called a “captive market” in Pakistan and the Middle East.
According to PIA spokesperson Abdullah Hafeez Khan, the airline runs around 20 flights daily to the Middle East.
Habib plans to invest around Rs112 billion ($400 million) in PIA to turn the airline around, implementing short- and long-term improvements ranging from upgrading seats to tripling the 19-aircraft fleet, and engaging a foreign airline as a technical partner through strategic divestment over the next seven to eight years.
The group also intends to reduce PIA fares to make air travel more affordable for passengers from Pakistan’s low-income groups.
“Yes, we have been advised that in order to increase our market share, we will have to rationalize the airfares,” Habib said. “That is in the plan, and we will unfold it as it comes.”
The new owners have engaged a global advisory firm, Seabury Aviation Partners, to identify viable markets for the newly privatized airline and expand its presence both locally and internationally.
Habib aims for up to 7.5% annual growth in PIA’s operational revenues to make it profitable and the new management is targeting European and North American markets, particularly routes to and from the United Kingdom, the United States and Canada, for this purpose.
“The UK is the most lucrative market where I think there is a lot of demand,” he said, adding they would also be seeking more flight destinations. “Even for USA there is demand there.”
Habib, however, said the airline would take time to deliver “reasonable” returns to its investors, including AKD Group Holdings, Fatima Fertilizer Company, City Schools, Lake City Holdings and Fauji Fertilizer Company, a publicly listed firm owned by Pakistan’s military.
“In initial period of one to two years, we may see some losses but into medium term, I think, that would be turned around,” he concluded.
PIA posted a pre-tax profit of Rs11.5 billion ($41 million) for the January–June 2025 period, its first such profit for this timeframe in nearly two decades, according to a Reuters report in September. The airline recorded losses during the same period in 2024.
Once considered one of Asia’s leading carriers, PIA struggled with chronic mismanagement, political interference, overstaffing, mounting debt, and operational issues that led to a 2020 ban on flights to the European Union, the UK, and the US following a pilot licensing scandal. The EU and UK have since lifted their bans, giving the airline renewed momentum, while the US ban remains in place.
On Tuesday, PIA announced that the airline will be expanding its UK operations and will operate four weekly flights from Islamabad to London starting Mar. 29.
“The flights are being resumed after a long gap of six years,” PIA spokesman Khan said in a statement. “PIA is already operating three weekly flights to Manchester.”
