International transport channels, including air travel and shipping, which were significantly affected by the military standoff between India and Pakistan, are likely to return to normal by the end of the week.
While India and Pakistan came to a mutual understanding to cease fire across land, water and sea, logistics experts and industry insiders expect logistics networks and supply chains to return to normal by around May 20.
"Despite the announcement of a ceasefire, there are still fears of ceasefire violations that can occur between the two nations, which will impact the sentiment of international logistic players," Lokesh Sharma, a senior aviation and defence expert, told Moneycontrol.
He added that Indian airlines will have to rearrange their flight schedules for both passenger and cargo operations following the ceasefire and will also have to address the backlog of passenger cancellations, which is likely to limit the speedy and efficient air traffic recovery.
Similarly, export-import (EXIM) players and ports in India are facing shipment delays, a surge in insurance and shipping rates and the threat of the overhanging US tariffs, which will limit a quick recovery of shipping supply chains from India, he said.
Logistics networks, e-commerce supply chains and international cargo networks have faced significant disruptions in the past 15 days due to the military escalation after the Pahalgam terrorist attack on April 22.
While delivery service providers are struggling to meet deadlines due to cargo flights being grounded or diverted, India's MSME exporters are once again faced with challenges to protect their operating margins after having already spent the better part of FY25 grappling with the after-effects of wars, US tariffs and the crisis at the Red Sea.
Air passenger and cargo traffic
Following India’s military strikes on May 7, international and domestic air traffic over India and Pakistan faced disruption, with around 2,500 domestic flights being cancelled in India between May 8 and 12, as around 32 airports were shut down in India, and a few hundred international flights were also scrapped.
Many international airlines said they were re-routing or cancelling flights over or near the region. Dozens of flights were cancelled or diverted to avoid Pakistan’s airspace, flight-tracking website FlightRadar24 showed.
An e-commerce industry executive said that Indian supply chain systems are built in such a way that most warehouses and fulfilment centres will have the inventory to cater to immediate needs, which is over a week or 10 days.
“The closure of airports may disrupt the supply chain of e-commerce companies in maintaining their committed delivery timelines and the inventory," C.K. Govil, president of The Air Cargo Agents Association of India (ACAAI), had said on May 9.
The Indian government resumed operations at 32 airports on May 12, including those in the border areas of Jammu & Kashmir and Punjab. These airports had been temporarily shut following the military conflict.
Pakistan withdrew the closure of its airspace to civil aircraft operations, as per a Notice to Airmen (NOTAM) issued by the Pakistan Civil Aviation Authority (PCAA) on May 11.
The ban on Indian airlines and aircraft from Pakistani airspace, which was imposed from the evening of April 24, remains in place as the status of that NOTAM showed as “Valid” on the PCAA’s database. India’s ban on Pakistani airlines and aircraft in its airspace also stays.
Around 20 percent of all flight routes used by Indian carriers cross Pakistan for foreign destinations in West Asia and around 30 percent of all flights to North America and Europe pass through that country.
An estimated 800 international flights of Indian airlines flew over Pakistani airspace every week in March 2025 and rerouting has become a complex and costly affair for them as international flights from Delhi, Amritsar, Srinagar, Chandigarh, Ahmedabad, Kolkata, Lucknow and Jaipur to cities in the Middle East are now flying an additional 15 to 45 minutes and another 1.5 hours to flights going to Europe.
The diversions are likely to be phased out after further discussions between the Director Generals of Military Operations (DGMOs) of India and Pakistan which start on May 12.
Shipping traffic
Heightened tensions between India and Pakistan had significantly disrupted regional trade, as major global shipping lines suspended services to Karachi Port and rerouted cargo to alternative points. A vital trade corridor through Mundra Port, commonly used for European-bound shipments, was effectively shut down from May 8 to May 12.
While Kandla and Mundra ports in Gujarat resumed operations on May 9 after being shut overnight amid rising tensions with Pakistan, the Kandla port is expected to see lower traffic due to some congestion challenges arising from the port closures.
"We expect the operations at Kandla port to return to efficient normal conditions by the end of the week," a senior executive from Deendayal Port Authority (DPA) told Moneycontrol. They added that the DPA is in constant dialogue with shipping lines and is ensuring them of safe and efficient passage when docking at Kandla Port.
Kandla, which handles both liquid and bulk cargo, and is one of the 12 major ports in India, also observed a blackout on May 8.
“At present, the port is functioning with Level 2 security. But if we have to cease operations again, then vessel turnaround times will shoot up,” a senior executive mentioned above said on the condition of anonymity.
Surcharge on cargo services to Karachi
Many international shipping lines, including Chinese logistics companies, COSCO and OOCL, and French shipping and logistics group CMA CGM, suspended their operations in the region. MSC is also using Colombo in Sri Lanka as a new transhipment centre to supply cargo to both India and Pakistan, while Maersk was actively reviewing its routes.
COSCO, one of the world's largest shipping firms, issued a statement announcing the halt of all cargo services to Karachi due to escalating conflict. The notice also warned that ships currently en route may be redirected to alternative ports such as Port Klang in Malaysia.
Similarly, 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 US, 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 the ongoing geopolitical situation in the region.
The Indian Air Force raids on nine terror hideouts across Pakistan and Pakistan-occupied Kashmir blocked important transport routes between the north and south of the country.
Following this, various shipments arrived late at the Karachi port and were not loaded onto the booked ships. Instead, they were rebooked onto other ships. As these ships have not called at the port of Karachi since the trade restrictions were imposed, many containers are still in the harbour. The current lack of ship capacity is leading to rebookings, delays and rollovers in both countries.
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