Pakistan-India tensions disrupt trade, spike freight costs

Escalating tensions between Pakistan and India have severely impacted regional trade, causing delays in cargo movement and prompting shipping lines to raise freight charges, business and shipping sources told Nukta.

Export containers bound for Europe and other destinations are now stuck, as cargo vessels show reluctance to dock at ports in both Pakistan and India amid the ongoing uncertainty.

Traditionally, Pakistan’s shipments to Europe were routed via India’s Mundra Port in Gujarat, but that option has now been disrupted. Following mutual bans placed by the two countries on each other’s national flag carriers and goods of origin, international shipping lines have begun rerouting their services.

Some traders said they had received notifications from shipping companies about revised freight rates.

A cargo agent from Sialkot told Nukta that two Chinese carriers had temporarily suspended operations in the region. Cosco, one of the affected companies, cited the conflict as the reason for halting cargo transportation to Karachi.

"Due to the changes in the situation of the India-Pakistan War, our company will suspend the cargo transportation to Karachi for subsequent voyages," Cosco said in a notification. "The specific resumption time will be notified by the headquarters after the war situation stabilizes."

Cosco also warned that vessels already en route to Karachi may face delays and could be diverted to alternate ports such as Port Klang in Malaysia.

OOCL, another major shipping line, confirmed the suspension of Karachi-bound bookings. "OOCL CIX1/2/CPX3 has suspended KHI S booking pending further notice," the company said.

It also announced a price hike of 1,000 yuan or $138 per container for the Karachi port.

Traders expressed concern over the rising costs and logistical hurdles. “These delays are hurting our ability to fulfill international orders,” one exporter said.

"The aftermath of last month’s transporters’ strike is still being felt, as congestion at Karachi Port persists. Cargo from vessels that arrived on May 1 has yet to be destuffed due to a lack of space," an importer told Nukta.

In addition to sea freight disruptions, cargo movement has also been affected by intermittent suspensions of air freight operations, further straining supply chains.