PTC urges govt to consider temporary facilitation mechanisms like TERF

ISLAMABAD: The Pakistan Textile Council (PTC) has urged the government to consider temporary facilitation mechanisms, similar to the Temporary Economic Refinance Facility (TERF) introduced during the COVID-19 pandemic, to help exporters manage the rising logistics costs caused by increased insurance premiums and emergency surcharges.

In a letter to the Minister for Maritime Affairs Junaid Anwar, PTC Chairman Fawad Anwar highlighted the challenges currently facing the textile sector.

The minister on Tuesday called a meeting of exporters and importers to discuss their concerns. At present, the industry is facing a shortage of raw materials on the one hand and higher import costs on the other. Exporters are also struggling to dispatch their consignments.

READ MORE: ME unrest: Textile industry seeks protective measures

According to the PTC, recent disruptions in Gulf shipping routes have significantly increased freight costs and created operational uncertainty. Pakistan handles approximately 3.8 million TEUs of container trade annually, with a substantial portion routed through Gulf transshipment hubs.

The imposition of war risk surcharges ranging between USD 2,000 and USD 3,000 per container has created an unprecedented financial burden for Pakistani exporters.

In this context, the PTC proposed the following measures for consideration: (i) Pakistan High Commission in London be requested to initiate engagement with international marine insurance and reinsurance markets, including the Lloyd’s of London, through appropriate channels and insurance brokers to provide a risk-sharing mechanism backed by Sovereign Guarantee that can help reduce or negotiate down the war risk surcharges imposed by foreign shipping lines for Pakistan-linked cargo movements; (ii) National Insurance Company Limited (NICL) and Pakistan Reinsurance Company Limited (PRCL) may be requested (directly or in collaboration with some strong international insurers to introduce competitive war risk insurance coverage for vessels serving Pakistan routes, reducing dependence on expensive international markets; (iii) given the sharp increase in insurance premiums and emergency surcharges, the Ministry may consider working with relevant financial institutions to explore temporary facilitation mechanisms like TERF during COVID-19 that may help exporters manage the additional logistics cost burden; (iv) Ministry may consider directing the Pakistan National Shipping Corporation (PNSC) to assess the feasibility and submit a plan of temporarily chartering container vessels to transport critical export consignments, either directly to destination markets or to major regional transshipment hubs; and (v) exporters are increasingly facing demurrage and detention charges caused by delays in the issuance or transmission of Bills of Lading by shipping lines and agents. In many cases exporters have fulfilled all documentation and cargo handling requirements, yet containers incur penalties due to administrative delays beyond their control.

The PTC suggested that port authorities and regulators develop a mechanism whereby demurrage and detention charges are waived or suspended when delays occur due to shipping line documentation processes, particularly delays in issuance of Bills of Lading.

Pakistan’s export sector is currently operating under significant cost pressures including energy tariffs, logistics disruptions, and financing constraints.

The additional burden arising from shipping surcharges and operational bottlenecks could undermine export competitiveness at a critical time for the country’s external sector, said Fawad Anwar.

Copyright Business Recorder, 2026