The Pakistan National Shipping Corporation (PNSC) signed a memorandum of understanding (MoU) with Chinese shipping giant, Shandong Xinxu Group, on Thursday in a move that is set to bring about a “major transformation” in the shipping sector.

PNSC, headquartered in Karachi, is Pakistan’s premier national flag carrier, operating under the Ministry of Maritime Affairs. The Shandong Xinxu Group Corporation, based in Zibo City, Shandong Province, is a leading Chinese enterprise engaged in international trade and shipping.

A statement from the Press Information Department said the MoU signing ceremony took place between the PNSC CEO and the chairman of Shandong Xinxu Group Corporation in Islamabad with Maritime Affairs Minister Muhammad Junaid Anwar Chaudhry present.

“The Pakistani shipping sector is set for a major transformation following the signing of a MoU,” he was quoted as saying by the statement.

Addressing the signing ceremony, he said the development symbolised a “growing partnership” between Pakistan and China in the maritime domain that would pave the way for “future cooperation, investment, and development” in Pakistan’s shipping industry.

He emphasised that the collaboration would boost regional trade, enhance connectivity and strengthen Pakistan’s role in the global maritime industry through cooperation and shared economic goals.

“This MoU establishes a framework of mutual trust and cooperation between the two entities, aimed at pursuing commercial benefits and creating favourable conditions for investment in Pakistan’s maritime sector,” the statement quoted him as saying.

“The understanding primarily focuses on collaborative efforts in several key areas. These include the sale and purchase of merchant cargo vessels such as liquid bulk tankers, dry bulk carriers, and containerised ships under joint or individual ownership, as well as through profit and loss sharing arrangements.”

The MoU also encompassed the leasing of such vessels by Xinxu to PNSC through various charter mechanisms, including time, spot and bare boat charters.

Another major component of the MoU involved the PNSC offering commercial, technical, and administrative management services for vessels as mutually agreed, covering areas such as chartering, marketing, revenue optimisation, maintenance, dry-docking, crewing and regulatory compliance.

“The MoU includes provisions for financing arrangements by Xinxu to PNSC for investments in ships and other floating platforms. These arrangements will be governed by commercially competitive terms, ensuring mutual benefit and financial viability,” the statement said.

In June, PNSC aimed to generate an estimated $700 million in freight earnings by expanding its cargo fleet to 34 vessels over the next three years as part of a broad strategy to revitalise the country’s maritime and logistics sectors.