The import and export trade volume between Pakistan and China has increased explosively against the global trend under the influence of epidemic. According to General Administration of Customs P.R. China, trade between Pakistan and China totaled US $12.56 billion in the first half of 2021, 1.6 times larger than that of the same period last year. The rapid growth of trade volume between both countries has brought great challenges to cross-border logistics and transportation, especially exports to China.
Shipping is the main method of transport for Pakistan’s exports to China. Currently, the capacity of maritime transport is tight and the freight rate remains high. Ms. Li Yiman, General Manager of Zhejiang Eman Supply Chain Management Company, said that in the case of aquatic products, there was a shortage of containers at the Karachi Port, and exporters of frozen aquatic products had to book space 1-2 weeks in advance. It is learned that about 90% of Pakistan’s exports of aquatic products to China are shipped from the Karachi Port.
Ms. Li believes that it is under the influence of a global shortage of shipping containers, plus the Pakistan route capacity has been squeezed to a certain extent, shipping space has also been reduced. In addition, due to the epidemic, the freight cycle is lengthened. It takes about a month from Karachi to complete customs clearance in China, and the customs inspection cycle for frozen products is relatively longer, affecting turnover efficiency. Thus, some cargo ships prefer to return to China even with empty containers.
“We have communicated with Yiwu Customs on how to improve the timeliness of the process while ensuring safety, such as preparing relevant documents before the arrival of the goods to facilitate rapid customs clearance.” Ms. Li explained.
Under the condition of insufficient supply of transport capacity, the demand for logistics is still rising. As per China Customs, Pakistan’s exports to China in the first half of 2021 crossed $1.735 billion, a growth of 70.3 percent as compared to 1H 2020 figures. In the case of supply falling short of demand, freight rates continue to rise. The shortage of seaborne capacity is expected to continue this year. “Shipping space in Pakistan is likely to continue to decrease in the second half of the year, and freight rates are still in the upstream channel.” Ms. Li stated.
For Pakistani and Chinese traders, the pressure of cross-border logistics will continue, but as logistics enterprises stretch to the upper and lower reaches of the industrial chain, full-chain services will bring ease to the situation. For example, in terms of exports to China, Eman Logistics has set up a Pakistan National Pavilion in Yiwu, the world’s largest small commodity distribution base, to regularly display Pakistani products, and organized Chinese buyers to visit Pakistan’s top 50 aquatic product companies to promote collaboration between Chinese and Pakistani companies.
“Pakistan is rich in fishing resources and has a huge market for fishing and processing seafood. Chinese companies can replicate their frozen product techniques to Pakistan.” It is learned that about 60% of Pakistan’s aquatic products are sold to China. In addition to aquatic products, mineral salt, ore, agricultural products, cotton yarn and handicrafts are all products that Pakistan often exports to China.
On the import side, cross-border e-commerce is on the rise. “Most of China’s investment in Pakistan’s logistics industry has shifted from traditional logistics (import and export) to cross-border e-commerce.” Ms. Li told Gwadar Pro that in 2019, Eman Logistics was awarded the Pakistan Purchasing Business Service Center by Yiwu Municipal Bureau of Commerce to provide one-stop service for nearly 1,000 Pakistani buyers and Chinese enterprises, to deliver small goods from Yiwu, China, to Pakistani consumers. “Our services include e-commerce DARAZ registration, sea and air e-commerce logistics, door-to-door bulk cargo, sorting and distribution of overseas warehouses, and we have also set up a warehouse in Karachi.”
As one of the Honorable Investment Counsellors appointed by the BoI, Ms. Li is confident that the future development of Pakistan-China trade will be more balanced. “At present, Pakistan imports more from China, and exports to China account for about 1/4 of Iman’s business. We plan to make Pakistan’s import and export to China at about 1:1 in the coming three to five years.”
Source: China Economic Net