Karachi Port is one of the largest and busiest deep-water ports in South Asia, handling about 60% of Pakistan’s cargo. (From Wikipedia)
Due to shipping disruptions in the Strait of Hormuz and conflicts in the Middle East, the transshipment volume at Pakistan’s Karachi Port has surged, exceeding the total volume for the entire year of 2025 in just 24 days. Officials indicated that shipping companies redirected their routes due to the closure of major ports in the Persian Gulf and that government-provided discounts of up to 60% on port fees attracted a surge in cargo.
According to Nikkei Asia, the shipping volume at Pakistan’s largest port, Karachi Port, has grown significantly because shipping services to Dubai and Salalah are hindered by the Hormuz crisis. Muhammad Junaid Anwar Chaudhry, Pakistan’s Federal Minister for Maritime Affairs, stated in a written statement to Nikkei Asia, “Karachi Port processed only about 8,300 transshipment containers for the entire year of 2025, but in the past 24 days, it has already handled 8,313 containers of transshipment volume.”
As shipping services to ports in the Persian Gulf such as Dubai and Salalah are disrupted due to the Hormuz crisis, shipping companies have begun offloading cargo in Karachi. Since the U.S. and Israel launched attacks on Iran on March 2, Iran effectively closed this waterway.
Experts point out that the significant increase in cargo volume is due to the Middle Eastern conflict, which has led traditional hub ports like Dubai’s Jebel Ali Port to come to a standstill. Naafey Sardar, an assistant professor of economics at St. Olaf College in the United States, noted, “Thus, shipping companies were forced to redirect to alternative ports, and Karachi benefited due to its proximity. Increased cargo volume will translate into higher income through port fees and associated charges.”
Existing foundation with foreign shipping companies
This surge in cargo also benefits from the existing foundation of foreign shipping companies. Ali Asad, a Karachi trade consultant, pointed out that Hutchison Ports in Hong Kong and global shipping companies such as Maersk and COSCO had already established operating systems in Pakistan.
Asad stated, “These business connections already existed, allowing them to quickly activate existing mechanisms to reroute cargo to Pakistan without starting from scratch once the crisis occurred.”
He added that Karachi ports previously had available capacity for more transshipment cargo. “With the borders to Afghanistan closed, transit trade has essentially halted, releasing port capacity.”
Up to 60% discount on port fees
Another important factor attracting transshipment demand is the government’s provision of discounts on port fees of up to 60% starting from March 18.
Aqdas Afzal, an economist who has previously provided financial advice to the Gulf states, noted, “The financial measure of reducing port fees by up to 60% provides an irresistible cost incentive for shipping companies to reroute to Karachi.”
However, experts believe that for this surge in cargo to become a long-term trend, Pakistan must formulate supporting policies. Afzal explained, “Only by integrating these short-term incentives into a stable, long-term policy framework and maintaining cost competitiveness can the transshipment transfer be sustainable.”
Asad also believes that the most significant long-term benefit of this surge in transshipment is enhancing Pakistan’s international image as a potential trade hub. “This demonstrates that Pakistan is capable of reliably handling international cargo, helping position it as an alternative option to traditional hubs in the Gulf.”
Financial constraints in Pakistan
However, Saleem Lalani, a senior finance professional who has worked in the Gulf region, remains cautious about the long-term growth of cargo volume at Karachi Port. He pointed out, “Ports are just one link in a multimodal logistics system, which also includes container terminals, warehousing, and integration with rail and truck transport.”
Lalani added, “Any increase in port or terminal capacity requires significant investment across the entire logistics and shipping value chain.” He hinted that Pakistan’s financial constraints might pose a major obstacle to further expansion.