Pakistan's heavy reliance on foreign shipping companies is costing the nation an estimated $6-8 billion annually in freight charges, significantly impacting its foreign exchange reserves and exacerbating economic challenges, according to The News International.
The country's sole national shipping company, the Pakistan National Shipping Corporation (PNSC), operates only 12 aging vessels and lacks a single cargo container ship, further compounding the issue.
A previously stalled initiative by PNSC to construct Pakistan's first 1,120 TEU container ship at Karachi Shipyard has been revived, offering a potential turning point for the struggling maritime sector. The project, initially estimated at Rs24 billion, significantly less than the Rs32 billion cost of a similar foreign-built vessel, was halted a year ago.
Sources within the Defence Ministry, citing findings from the Task Force on the Revamping of the Maritime Sector, indicated that the project’s delay resulted in lost revenue and potential cost escalations, while also hindering domestic capacity building and job creation. A major portion of the project was slated to be paid in Pakistani rupees, which could have eased pressure on foreign exchange reserves.
The decline of Pakistan's ship-breaking industry, once a global leader, further underscores the challenges. The Gadani ship-breaking yard, formerly the world's third largest in the 1980s, now generates a mere Rs0.3 billion annually. Outdated infrastructure, poor connectivity, and non-compliance with international regulations like the Hong Kong Convention (HKC) have crippled Gadani's competitiveness.
Experts warn that without modernization, Pakistan risks losing its remaining ship-breaking business when the HKC comes into effect in July 2025. India and Bangladesh, by contrast, have made significant strides, boasting 90 and six HKC-compliant yards, respectively.
To address these challenges, Pakistani authorities are focusing on several key initiatives: developing a National Container Fleet by supporting PNSC's pilot project and expanding local shipbuilding, modernizing Gadani through foreign investment and regulatory reforms, building international-standard shipyards at Port Qasim and Gwadar via joint ventures, and classifying inter-port cargo movement as ‘Coastal Trade’ to stimulate local shipping. These efforts aim to reduce dependence on foreign vessels, generate employment, attract foreign investment, and position Pakistan as a regional maritime hub.
Pakistan National Shipping Corporation (PNSC) is the national flag carrier of Pakistan and operates a fleet of vessels for cargo and passenger transport.
Karachi Shipyard is a Pakistani state-owned shipbuilding company.