Pakistan’s ports get war-time windfall amid shifting Gulf shipping routes

Pakistan's second-largest seaport, Port Qasim, is undergoing a $250 million capital dredging project to deepen and widen its navigational channel to accommodate larger vessels. This project, which began in May and is set to complete by mid-2028, is in response to the surge in transshipment at the country's ports, driven by the war between the US and Iran.

Port Qasim Authority (PQA) has handled 20,000 twenty-foot equivalent units (TEUs) of containers since February 2025, a four-fold increase from the same period last year when the port handled 4,000 containers. PQA's director-general of operations, Muhammad Khalid, anticipates the dredging project will enable the port to handle vessels with a draught of 15 meters.

The increased transshipment activity is attributed to the geopolitical situation in the region, which has diverted shipping routes. Karachi Port Trust (KPT), the country's largest port, handled a record 2.75 million containers last fiscal year, but officials are uncertain if this trend will continue permanently. The Pakistani government has introduced various concessions to attract shipping lines and make Karachi a regional transshipment hub.

PQA has waived wharfage charges for transshipment, increased free days to 28, and reduced wet charges. Industry experts believe the current surge in transshipment cargo could become a sustainable business model, with Karachi having the capacity to absorb additional traffic. The more significant change, however, may be in the regional shipping routes themselves, with ships now diverting to new routes, avoiding the Strait of Hormuz and the Red Sea.