Pakistan is in the midst of an economic crisis and logistics providers serving Pakistan are being forced to cut services due to foreign exchange shortages and controls. Express logistics giant DHL said it will suspend its import business in Pakistan from March 15, Virgin Atlantic will stop flights between London Heathrow Airport and Pakistan, and shipping giant Maersk is taking active measures to ensure the flow of goods.

Not long ago, the current Minister of Defense of Pakistan, Khwaja Asif, made a public speech in his hometown, saying: Pakistan is about to go bankrupt or face a debt default crisis. We live in a bankrupt country, and the International Monetary Fund (IMF) is not solution to Pakistan’s problems.

According to data released by the Pakistan Bureau of Statistics (PBS) on March 1, in February 2023, Pakistan’s inflation rate measured by the Consumer Price Index (CPI) soared to 31.5%, the highest increase since July 1965.

According to data released by the State Bank of Pakistan (Central Bank) on March 2, as of the week of February 24, the foreign exchange reserves of the Central Bank of Pakistan were 3.814 billion US dollars. According to Pakistan’s import demand, if there is no new source of funds, this foreign exchange reserve can only support 22 days of import demand.

In addition, by the end of 2023, the Pakistani government still needs to repay up to US$12.8 billion in debt, of which US$6.4 billion has already come due at the end of February. In other words, Pakistan’s existing foreign exchange reserves not only cannot pay off its foreign debts, but also cannot pay for urgently needed imported materials. However, Pakistan is a country that is highly dependent on imports for agriculture and energy, so various negative situations are superimposed, and this country is indeed on the verge of bankruptcy.

With foreign exchange transactions becoming a major challenge, express logistics giant DHL said it was forced to suspend local import operations in Pakistan from March 15 and limit the maximum weight of outbound shipments to 70kg until further notice. . Maersk said it was “making every effort to effectively respond to Pakistan’s foreign exchange crisis and maintain the flow of goods”, and recently opened an integrated cold chain logistics center to consolidate its business in the country.

The Pakistani ports of Karachi and Qasim have had to contend with a mountain of cargo as importers were unable to do customs clearance. In response to industry demands, Pakistan announced a temporary waiver of fees for containers held at terminals.

The Central Bank of Pakistan issued a document on January 23 advising importers to extend their payment terms to 180 days (or longer). Pakistan’s central bank said large numbers of containers full of imported goods were piling up at the port of Karachi because local buyers were unable to get dollars from their banks to pay for them. About 20,000 containers are estimated to be stuck at the port, said Khurram Ijaz, vice-president of the Federation of Pakistan Chambers of Commerce and Industry.

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