Pakistan’s trade with neighboring Afghanistan has been declining for years, but now delays in shipment clearance are threatening to undermine their bilateral commerce even further.
As many as 9,000 containers loaded with goods worth more than $400 million have been held up at Pakistani ports for about five months now. The reason for the holdup is two-fold: customs officials are screening all of the cargo passing through instead of the 5% they used to check before the Covid-19 outbreak, and also because not all trucks are tagged with GPS trackers, said Ghulam Nayab, commercial consular at the Afghanistan consulate in Karachi.
Pakistani authorities require the trackers to help monitor pilferage and ensure the containers don’t go missing on the route once infested by Taliban militants.
“Transit consignments that landed in June are still lying at Karachi port,” said Nayab.
South Asia Pakistan Terminal, the nation’s biggest and deepest container terminal, alone has a backlog of 1,600 boxes, according to Rashid Jamil, chief executive officer of SAPT, a unit of Hutchison Port Holdings.
The impasse is eroding the nation’s trade with Afghanistan — the only country in the world with which Pakistan runs a trade surplus.
Pakistani exports to Afghanistan have dropped more than 40% in the three years that ended in June, to $889 million, according to official data. Bilateral trade stood at $1.01 billion last fiscal year, down more than 38% from $1.64 billion in fiscal 2018.
TPL Trakker Ltd., the firm tasked with providing the GPS devices, denied there was a shortage of trackers, and said the delay was due to closer scrutiny of cargo by the authorities after the virus outbreak. A spokesperson for Pakistan’s Director General of Customs didn’t respond to multiple calls seeking comment.
Afghanistan has demanded that Pakistan waive the demurrage and detention charges, which range from $120 to $200 a day, according to Nayab’s letter to the Pakistani customs office.
“Traders are losing millions of dollars because of shipping and port demurrages,” Nayab said.
— With assistance by Faseeh Mangi