All export cargoes could come to a halt as foreign shipping lines are considering stopping their services for Pakistan, after banks reportedly stopped remitting freight charges to them due to the ongoing dollar shortage.
Nearly all of the international logistics from Pakistan are catered to by sea, and any disruption will create serious issues for the country’s trade with the rest of the world, the Pakistan Ship Agents Association’s (PSAA) chairman Abdul Rauf intimated finance minister Ishaq Dar in an open letter.
“If the international trade is stopped the economic situation will worsen,” the association said, warning that foreign shipping lines are already considering winding up their services in Pakistan due to diminishing cargo volumes.
The PSAA chairman also wrote letters to State Bank of Pakistan (SBP) governor Jameel Ahmed, commerce minister Syed Naveed Qamar and maritime minister Faisal Sabzwari
“Due to discontinuation of outward remittance of surplus freight amounts to respective foreign shipping lines, was hampering Pakistan’s seaborne trade which is heavily dependent on foreign shipping lines,” the letter said.
However, the ongoing crisis relates to export cargoes as all the outward trade from Pakistan is container-based, since there are no liquid or grain exports from the country.
It was recently reported that thousands of inbound containers carrying imported cargo were stuck at Pakistani ports, as banks refused to issue the credit letters and other documentation to release payments denominated in foreign currency.
State-owned Pakistan National Shipping Company (PNSC) only handles imports of crude oil and petroleum fuel through its meagre 12 vessels
The annual freight bill of Pakistan is around $5 billion, and foreign companies receive the charges in international currencies mainly the “greenback”.
The ship agents’ association pointed out that due to the state of affairs, the shipping sector was already suffering tremendously, and any further delays in remitting the legitimate dues of service providers will constrain Pakistan’s external trade, apart from reducing the trustworthiness of Pakistan’s economy.