Sharp reduction in cargo handling as land, air and sea routes closed

Published April 30, 2020
The sharp reduction in cargo handling will slash export growth during the ongoing quarter.
The sharp reduction in cargo handling will slash export growth during the ongoing quarter.

ISLAMABAD: Export cargo handling at the Karachi ports declined nearly 42 per cent in the last 38 days owing to closure of shipping lines and order deferrals by international buyers.

Karachi ports, which handle around 76pc of the country’s export cargo, have seen containers piling up at ports between March 22 to April 28 mainly due to order cancellations and non-availability of ships.

Data compiled by the Pakistan Customs showed total export containers shipped between March 22 till April 28 fell to 43,114 from 74,421 in the same period last fiscal year, showing a decline of 42pc.

The fall in shipments is expec­ted to bring down total exports to the United States and European markets. Meanwhile, as retailers across the world have shut down their businesses, only a few are honoring their import commitments with local manufacturers.

The data showed that around 11,969 export containers have piled up at Karachi ports since March 22, of which 5,065 export were stuck at Model Customs Collectorate (MCC) exports while another 6,904 were pending at Port Qasim.

At the same time, arrival of export containers at ports between March 22 to April 28 also declined by 26.26pc as ports received 55,083 shipping containers during the period compared to 74,708 last year.

In addition, exporters have already withheld their consignments after receiving cancellation or deferment messages from their international buyers.

Further break-up showed that arrival of export cargo at Port Qasim was much lower compared to MCC (exports), Karachi.

Arrival of export containers at Port Qasim dropped by 39.1pc as it received 26,093 containers during the period under review as against 42,846 over the corresponding period of last year.

On the other hand, cargo at MCC (exports), Karachi fell to 28,990 containers against 31,862 containers during the same period last year.

The sharp reduction in cargo handling is likely to bring down the country’s trade volume by the end of this quarter. Pakistan’s trade with India had already fallen to zero following the suspension of trade activities between the two neighbours.

In addition, trade through western borders—Chaman and Torkham -- to Afghanistan and the onward to the Central Asian States has also declined significantly owing to the spread of coronavirus. Only $61m worth of goods were exported to Afghanistan during March. The government has virtually banned all kinds of exports to Afghanistan except kinno to contain the spread of pandemic.

In addition to the land and sea routes, only 15pc of the export cargo is dispatched through air but that has also been severely affected due to air space closure.

In order to offset some of the impact from falling exports, the government recently allowed exports of textile masks. The government is also considering allowing shipments of Chloroquine drug to treat Covid-19.

Apparel Forum Chairman Jawed Bilwani told Dawn that exporters are now receiving export orders regarding anti-bacterial fabrics and other items.

A similar confirmation also came from Zubair Motiwala, Chairman Council of All Pakistan Textile Associations, who said that exporters are receiving orders for anti-bacterial and anti-fungus cloth, pillows cover, medical gowns, towel, bed sheets, and mask.

He claimed that several exporters received orders and inquiries regarding these products amid coronavirus outbreak across the world.

The government has recently released refunds as well as cash subsidies to export-oriented sectors to help these sectors overcome liquidity crunch. The government believes the industry will use the funds to give wages to workers and will not transfer the amount to other sectors.

Published in Dawn, April 30th, 2020

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