Pakistani exporters are facing soaring shipping costs to the U.S., with freight rates more than tripling on some routes as the Iran-U.S. conflict drives up war-risk insurance and fuel costs.
The increase is hitting Pakistan’s textile industry, its biggest export-earning sector, while the government has approved an energy trading agreement with Oman as disruption in the Persian Gulf raises concerns over fuel supplies.
Freight rates to the U.S. East Coast have risen 201 per cent, with a 20-foot container now costing $6,320, up from $2,100 in January, according to the Pakistan Ships’ Agents Association.
Rates for a 40-foot container have risen 216 per cent, to $7,900 from $2,500.
On the U.S. West Coast, a 20-foot container now costs $5,120, up 201 per cent, while a 40-foot container costs $6,400, an increase of 220 per cent.
The shipping industry attributes the surge to higher war-risk insurance premiums and bunker fuel costs as the regional conflict disrupts commercial shipping.
The U.S. is Pakistan’s largest export market, accounting for 19.9 per cent of the country’s exports during July-March in FY2026. Pakistan’s exports of goods and services to the U.S. reached $6.125 billion in FY2025-26.
Pakistan’s textile industry is particularly exposed, with exports totalling $17.932 billion in FY2025-26.
The All Pakistan Textile Mills Association has said freight costs from Karachi to major U.S. ports have risen from about $4,000-$5,000 to as much as $12,000-$13,000 per container.
Exporters are also facing higher inland transport costs, adding further pressure on shipments that were priced months before the freight increase.
For exporters with freight-inclusive contracts, much of the additional cost falls on them, squeezing margins and making Pakistani goods less competitive in the U.S. market.
Pakistan was removed last month from a global high-risk maritime list used by marine insurers, but shipping industry officials say the move has done little to offset the wider increase in insurance, fuel and freight costs.
The pressure is also being felt on imports.
Pakistan’s Economic Coordination Committee (ECC) on Monday approved a sale and purchase agreement between state-owned Pakistan State Oil and Oman’s OQ Trading, under an earlier intergovernmental agreement between the two countries.
The agreement is intended to deepen energy trading cooperation between the two companies. Pakistan had already been seeking additional and preferential energy cargoes from Oman as it looks to strengthen fuel supplies amid disruption in the Persian Gulf.
The ECC has also approved measures to develop strategic petroleum reserves and promote customs-bonded storage facilities, with the aim of strengthening the resilience of Pakistan’s petroleum supply chain.
Pakistan imports most of its oil and gas from the Middle East, leaving energy supplies exposed to disruption around the Persian Gulf and the Strait of Hormuz.
The conflict is therefore driving up costs on both sides of Pakistan’s external trade - making exports more expensive to ship to its biggest market while increasing risks to the imported energy needed to keep its economy running.
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