Pakistan’s export sector is coming under increasing pressure due to a nationwide strike by freight hauliers. Road transport of freight, containers and commercial consignments has largely ground to a halt. Containers carrying export shipments are stuck in ports and at other hubs in the logistics chain.
The longer the strike lasts, the greater the damage. Storage and demurrage costs are mounting, delivery schedules are being disrupted and Pakistan’s much-needed foreign exchange earnings are at risk. The strike may also have noticeable consequences for European importers sourcing goods from Pakistan.
Transport strike brings freight transport in Pakistan to a standstill
The strike by Pakistani freight carriers has now been going on for over a week and has severely disrupted normal freight traffic on key commercial routes. Companies that rely on road transport are deeply concerned about delays affecting raw materials, finished products and imported cargo.
Pakistan’s export-oriented industries are particularly vulnerable. They rely on uninterrupted road links between factories, inland ports, seaports and international markets. If any one of these links is lost, the entire supply chain grinds to a halt.
For the container shipping industry, this means that export cargo barely reaches the ports, if at all, whilst import containers are not being cleared. This can lead to congestion at terminals and disruption to sailing schedules to Europe.
Containers are stranded in ports, costs are mounting
According to reports, containers carrying export shipments are stuck in Pakistani ports and at other key points in the logistics chain. Every extra day of delay translates directly into higher costs for storage and demurrage.
These costs are in addition to the commercial losses resulting from missed delivery deadlines. Exporters who fail to deliver on time risk fines, cancelled orders and damage to their reputation with international customers. For a country that relies heavily on foreign exchange earnings from exports, this is a serious risk.
If you’d like to know exactly how container-related costs arise and how to minimise them, read more on the container handling page.
Pakistani government urges an end to the strike
Pakistan’s Minister of Planning, Ahsan Iqbal, has called on hauliers to end the strike and resolve their grievances through negotiations. He stated that disrupting export shipments is not in the national interest.
In a video statement, Iqbal described boosting exports as Pakistan’s top economic priority. He said the country needs every dollar of foreign currency. He warned that exporters could suffer significant losses if the transport blockade continues.
The minister described exports as a national priority and a state of emergency, and indicated that the government is prepared to sit down with the hauliers to negotiate their demands.
Transport operators’ demands: taxes, tolls and diesel prices
The hauliers are sticking to their position: their demands must first be met before they resume work. Their main objections centre on the introduction of rules regarding axle loads, taxation and withholding tax, toll charges, diesel prices and fines relating to freight transport.
As long as the two parties fail to reach an agreement, the deadlock will persist. Exporters are urging the authorities to reach an immediate settlement with the hauliers to prevent further damage to Pakistan’s trade flows and foreign exchange earnings.
Domestic disruptions of this kind demonstrate that risks in the logistics chain do not arise solely at sea. Road transport, both before and after the main leg of the journey, is also a crucial link that can determine the lead time of an entire shipment.
Pakistan’s export industry is particularly vulnerable
Pakistan is heavily reliant on sectors such as textiles, clothing, rice, leather and sports goods for its export earnings. It is precisely these industries that often operate to tight delivery schedules for Western customers, including European retailers and wholesalers.
When containers fail to reach the port, shipments miss their scheduled departure. The next available departure may not be for days or even weeks, particularly when capacity on the route is tight. In this way, a local strike can have knock-on effects on delivery schedules on the other side of the world.
Furthermore, for the wider market, disruptions in supply chains can increase demand for alternative routes and modes of transport. More information on current developments in the container market can be found on the sea freight rates page.
What does the strike mean for Dutch importers?
Dutch and European companies importing goods from Pakistan would be well advised to factor in delays. Check with suppliers to ensure orders reach the port on time and enquire whether scheduled sailings will be met. You should also allow for potential additional costs for storage and demurrage, which suppliers may pass on.
Clear agreements are now more important than ever. Set out who bears which risks and costs in the event of delays and check the delivery terms in current contracts. Read more about incoterms, importing and sea freight.
TOP is closely monitoring the situation in Pakistan, the impact on sailing schedules and broader developments in the container market. Anyone expecting shipments from the region or planning new orders is advised to compare rates and options in good time via the ‘Request a Quote’ page. Logistics is also rapidly becoming digitalised: real-time tracking and AI-driven planning help to identify disruptions sooner.
…demurrage and detention charges per container per day can mount up quickly once the free period at the port has expired? In the event of large-scale disruptions, such as a transport strike, these costs can exceed the original sea freight rate within a matter of weeks.
