KARACHI: Global logistics company DHL on Monday announced it was scaling down its operations in Pakistan following restrictions imposed by the government on the outflow of remittances, as the South Asian nation grapples with dwindling foreign exchange reserves.
Pakistan is facing a balance of payments crisis and foreign exchange reserves held with the central bank have fallen below a three-week import cover, forcing the government to restrict outflows of the US dollar. Faced with critically low US-dollar reserves, the government has banned all but essential food and medicine imports until a lifeline bailout is agreed with the International Monetary Fund (IMF).
Industries such as steel, textiles and pharmaceuticals are barely functioning, forcing thousands of factories to close and deepening unemployment.
The country’s banks are also delaying or denying the opening of Letter of Credits (LCs) for the import of goods while a huge number of import cartons await clearance at the country's ports.
In a customer notice on Monday, DHL said regulatory authorities had imposed restrictions on outward remittances for foreign companies operating in Pakistan, making it“unsustainable for DHL Express to continue providing the full product offerings in Pakistan.”
“Effective 15 March 2023, we will be suspending our ‘Import Express Product’ and restricting outbound shipments to a maximum weight of 70 kg per shipment for all customers billed in Pakistan,” the customer notice read, adding that the last pick-up date would be March 14, 2023 but shipments picked up on or before this date would still be delivered.
The German logistics company providing courier, package delivery and express mail services delivers over 1.8 billion parcels per year in over 220 countries and territories.
Mirza Fawad Ali, vice president of commercial operations at DHL Express Pakistan, told Arab News the decision to suspend imports and limit outbound shipments had been made by the company’s global board.
“The global board of DHL has decided to limit operations in Pakistan due to the constrained being faced by the company,” Ali said.
DHL officials said remittances sent by DHL Pakistan covered the cost of DHL's international aviation, hub, gateway and last-mile deliveries incurred through the global network for shipments sent and received by customers.
Ali said some stuck payments dated back to 2021. However, he said the company was in contact with authorities to allow for the resumption of the full suite of services in Pakistan at the earliest.
“We hope that the things would soon improve and we will be able to resume our services in Pakistan at full scale,” Ali said.
Low foreign exchange reserves in recent months have exerted immense pressure on the country's national currency, which has witnessed massive devaluation against the greenback and traded at Rs259.92 in the interbank market on Monday.
