Logistics Crisis in Pakistan: India’s Transit Ban Causes Port Congestion and Shipping Cost Surge

International carriers are bypassing Pakistan’s ports after India imposed a transit ban, leading to severe container backlogs, rising logistics costs, and a heavy blow to the country’s export sector.

1. Root Cause

India recently imposed a ban on the transit of goods originating from Pakistan through its territory, including the commonly used “Remaining On Board” (ROB) method — where cargo stays on the vessel during transshipment at Indian ports like Mundra and Nhava Sheva.

This policy shift has forced global shipping lines to reroute and remove Pakistani ports from their schedules, creating widespread disruption in the regional supply chain.

2. Impact on Ports and Shipping Lines

According to the Pakistan Ship Agents Association (PSAA), major shipping lines such as MSC (Switzerland) and CMA CGM (France) have either canceled or altered services involving Pakistani ports:

• MSC rerouted all shipments to Colombo (Sri Lanka) instead of calling at Pakistan.

• CMA CGM dropped Karachi from at least four of its service routes.

Vessels departing from Pakistan are now redirected to ports in Dubai, Colombo, or Jebel Ali instead of Indian transshipment hubs.

(Source: Nguyen Viet Duc – LOGISTICS VIETNAM)

3. Consequences

These reroutings have led to serious port congestion at major terminals like SAPT, QICT, and Karachi Gateway Terminal, with hundreds of containers stuck awaiting clearance.

Khurram Mukhtar, Honorary Chairman of the Pakistan Textile Exporters Association, stated:

“We are seeing significant container backlogs at the ports. The textile sector, which generated $17 billion in exports last year, is being heavily impacted.”

To maintain operations, MSC has launched the “Pakistan-Colombo Shuttle Service,” a weekly feeder route connecting Pakistani export cargo to global destinations via Sri Lanka.

At the same time, shipping lines have introduced emergency surcharges for Pakistani shipments. To specify, CMA CGM has implemented an Emergency Operational Recovery Surcharge (EORS) of up to $800 per container for cargo bound for the U.S., Latin America, and Australia, effective from May 15 to June 6.

4. Economic Risk for Pakistan

The current situation poses a serious threat to Pakistan’s economic recovery, which has recently gained momentum through a $7 billion IMF loan program. The country, with a population of 240 million, relies heavily on exports for growth. In the latest fiscal period, exports increased by 6% to reach $27 billion.

However, the crisis could undermine these gains:

• Logistics costs are soaring.

• Prolonged container dwell times may trigger port storage fees.

• Disruption may damage the reliability of Pakistani exporters in the global supply chain.

PSAA Chairman Mohammed A. Rajpar criticized India’s decision as “unjustified” and a violation of international trade conventions, calling it a deliberate move to discourage foreign carriers from serving Pakistan.

5. Conclusion

This port crisis serves as a stark reminder of the vulnerabilities in regional logistics networks. Overreliance on Indian transshipment routes has exposed strategic weaknesses for Pakistani trade.

In response, businesses must stay alert to geopolitical risks and diversify their logistics strategies to build greater supply chain resilience.