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Pakistan Container Strikes Wreak Untold Economic Damage

Karachi ports were stymied by a goods-carrier strike, which lasted for more than a week’s time. Protesting container workers and customs officials have threatened to completely shut down the daily transportation of consumer goods if their demands remain unmet, wreaking untold economic damage on a country heavily dependent upon exports, particularly garments.

Two container ports in Karachi are shut down, the Pakistani International Container Terminal and Karachi International Container Terminal. Authorities estimate that twelve container vessels were held up, three freighted with coal and one with cement. More than 7,000 containers with export ready goods destined for foreign locations were being held up. All in all, 35,000 containers were queued up, unable to leave their ports.

Insiders say it is unclear what precisely the government was doing to resolve the standoff. Mohammas Shoaib Khan, secretary general of the United Goods Transporters Alliance, said that authorities have yet to demonstrate any serious commitment to brokering a suitable compromise. Apparently, several meetings have occurred between Sindh government officials including Governor Ishratul Ibad and the Commissioner of Karachi but without any discernible progress as a result.

The workers were protesting what they call systemic corruption among government officials including extortion, bribery  and outright theft. They also complain of cripplingly high taxes, indiscriminately raised without public consent.

Tensions between workers and officials have been high even before the strikes. Last month, customs officials protested a decision by law enforcement authorities to suspend thirteen customs group officers for their alleged involvement in the illegal removal of thirty-five containers at Port Muhammad Qasim without filing the appropriate paperwork.

The Federal Bureau of Revenue (FBR) placed the officers under suspension until a more thorough investigation could be completed. At least at this preliminary stage of investigation, it has been determined that the containers, which were supposed to be filed with auto-parts, were also transporting other illicit goods. According to the charges, the customs officers knowingly shielded the containers from inspections, potentially costing billions of rupees in duties collection.

It is estimated that this last strike is delayed more than $390 million in goods intended for US shores. It’s still uncertain what the ramifications of these delays will be in terms of fines and additional costs.