Amid border tensions, spotlight on Karachi port that handles 76% of Pakistan’s exports

Tensions between the two neighbours have escalated after India responded to the Pahalgam terror attack with 'Operation Sindoor' on May 7 hitting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir.

Pakistan’s Karachi port, handling a majority of the nation’s shipments, is a crucial gateway for Islamabad when it comes to the movement of goods at a time of escalating border tensions.

A report by S&P dated September 2024 has stated that 76 percent of exports from Pakistan are handled by the port city of Karachi, which includes Port Qasim, Karachi Port East and West, and MCC Port Qasim.

Approximately 83 percent of all imports into Pakistan are handled by MCC Port Qasim, EPZ, and Karachi Air Freight Unit, suggesting the city carries a disproportionately large burden of all import handling.

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For exports, a sizeable 40.4 percent of all outbound shipments pass through Port Qasim (PQA), followed by Karachi Port (KPT) with 34.3 percent.

The Islamabad Air Freight Unit, which primarily transports surgical supplies and medications, is the second busiest port, after Lahore Air Freight Unit, which oversees around 8.1 percent of Pakistan’s overall exports.

The contribution from Lahore Air Freight unit is 8.1 percent, but the percentages from Sialkot and Islamabad are 3.44 and 3.42 percent, respectively. Chaman contributes 1.77 percent, while Lahore Dry holds a 1.79 percent stake, the report said.

While the relative shares of Ghulam Khan, Quetta, and Faisalabad are 0.17 percent, 0.48 percent, and 0.2 percent, respectively, that of Kharlachi KPK, Peshawar, and Multan are 0.08 percent, 0.08 percent, and 0.15 percent.

The combined shares of Multan Dry, Angoor Ada, Gujranwala, Saindak, Risalpur, Gwadar, and Sust in the total exports range from 0.06 percent to 0.01 percent.

While, the conflict is yet to spread to the seas, one of the world’s leading shipping firms, CMA CGM, has already introduced a surcharge, which will apply to all cargo involved in trade with Pakistan.

The surcharge amounts to $800 per unit for routes from Pakistan to Europe, the Mediterranean, the US, and Africa, as well as from Asia to Pakistan.

A lower surcharge of $300 per unit will apply to shipments from Europe, the Mediterranean, the US, Canada, and Africa to Pakistan and vice versa.

The surcharge will be effective from May 15, 2025, for all shipments, with shipments originating from the United States, Latin America, and Australia subject to the charge from June 6, 2025.

In an official notice, CMA CGM confirmed on May 9 that the surcharge was being introduced due to operational disruptions caused by ongoing geopolitical situation in the region.

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“Recent geopolitical developments in the region are significantly impacting our operations,” the company stated. The surcharge will apply to all cargo, including floating cargo, and is payable alongside freight charges for shipments with a sailing date on or after the specified dates,” the shipping firm said.

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Tensions between India and Pakistan have escalated after Islamabad’s latest ceasefire violations and attempts to target military installations along the border states. This has led to businesses in India’s western border states being in a state of high preparedness, and district administration have issued advisories.