The Red Sea trade crisis has triggered a 150% increase in freight charges in Pakistan, endangering the export of key commodities such as textiles, rice, fruits, and vegetables.
In a discussion with journalists, Aasim A Siddiqui, Chairman of the All Pakistan Shipping Association (APSA), disclosed that the average freight charges have escalated from $1,500 to $2,500 per container following the maritime trade crisis on the East-West route.
Prior to the crisis, sparked by Houthi attacks on cargo vessels, freight charges were approximately $1,000 per container. The rerouting of vessels via Africa to evade the crisis has led to longer delivery times, a shortage of empty containers, and demurrages in various countries, including Pakistan.
Siddiqui refuted claims by local businessmen and trade bodies accusing shipping companies of causing the drastic increase in freight charges. He attributed the surge directly to the Red Sea tension. The extended shipping route now takes three weeks compared to the one week it took via the Red Sea, leading to a shortage of containers and subsequent rise in freight charges.
The crisis has caused freight charges to exceed the export price of rice, threatening Pakistan's second-largest export. The largest export sector, textiles, along with fruits and vegetables like mandarin (kinnow) are also at risk.
Source: tribune.com.pk