Exporter seeks relief as Pakistan-US shipping costs surge 200% amid Iran war

Shipping costs for Pakistani exporters to the United States have surged by more than 200 per cent on some routes, as fallout from the Iran war disrupts shipping lanes and drives up war-risk insurance and fuel costs, Ismail Suttar, founding chairman of the Salt Manufacturers Association of Pakistan (SMAP) said.

A container shipment from Karachi to New York that once cost around $2,000 is now being quoted at $8,000 to $9,000, said Ismail, warning that the added cost could undermine the competitiveness of Pakistani products in the US market, read a statement on Monday.

Suttar urged the government to take immediate notice of the situation and formulate an emergency strategy to contain the impact of rising freight charges on exporters.

“Shipping rates have increased globally, but the increase on some routes from Pakistan is disproportionately high,” he said, adding that exporters were being forced to absorb a substantial additional cost.

He said the disruption had also hit the Karachi-Jebel Ali route, where freight charges that previously stood at $100-200 had risen to around $4,000-5,000, even as vessel availability declined considerably — a supply-demand imbalance that had further driven up rates.

The cost differential was especially stark against competing export destinations, he said. A container from Vietnam to New York currently costs around $3,000-4,000, compared with $8,000-9,000 for the same shipment from Pakistan.

“This creates a difference of around $5,000 for Pakistani exporters and puts them at a clear disadvantage when competing for international orders,” he said.

Suttar also pointed to Pakistan’s lack of an effective national shipping carrier and an adequate containerised cargo fleet as a structural disadvantage, noting that countries such as China and Korea had national carriers that supported their trade through periods of international disruption.

He called for the immediate formation of an inter-ministerial committee — comprising exporters, shipping companies and relevant government agencies — to assess the extraordinary rise in freight charges and devise measures to provide relief to exporters.

Failure to intervene promptly, he warned, could lead to a decline in export orders, add further pressure on foreign exchange earnings and weaken Pakistan’s position in international markets.

“The government needs to move from a reactive approach to proactive policy-making and continuously monitor changes in global shipping routes, freight rates and supply chains,” he said.