LMA removes Pakistan from high-risk maritime zone list

ISLAMABAD: The Lloyd’s Market Association (LMA) has removed Pakistan’s territorial waters from the high-risk areas listed under LMA’s Joint War Committee (JWC), a move that will help reduce war-risk insurance premiums and shipping costs. This was announced here on Thursday by the Federal Minister for Maritime Affairs, Muhammad Junaid Anwar Chaudhry. He called the development a historic achievement which would improve the competitiveness of Pakistani exports and strengthen the confidence of international shipping companies, traders and investors. He said the move could also make Pakistani ports in Karachi and Gwadar more attractive to global shipping lines and investors, creating opportunities for regional trade, cargo transit and trans-shipment. Pakistan had remained on the committee’s listed areas for years. In March this year, the JWC also expanded its designated high-risk maritime zone in response to escalating tensions in the Gulf, extending the notification area eastwards to Pakistan’s coastline as part of a broader revision covering the Arabian Gulf, Gulf of Oman, Gulf of Aden and southern Red Sea. According to Chaudhry, the government began efforts to secure Pakistan’s removal from the list on March 13, 2026 after identifying its inclusion as a factor that increased maritime trade costs through additional war-risk insurance premiums and surcharges. He said that subsequently, Prime Minister Shehbaz Sharif formed a committee, with Chaudhry, to pursue the matter through negotiations with the LMA. The committee presented Pakistan’s case using technical evidence and security data, the minister said, adding that months of discussions eventually resulted in Pakistan’s removal from the listed areas. The minister said the government would continue efforts to improve maritime safety, expand port capacity and attract investment as part of its plans to position Pakistan as a regional logistics, transit and trans-shipment hub. Pakistan, in recent months, especially after the start of the Gulf crisis, has taken several measures to expand the country’s maritime trade, including tariff reduction, elimination of wharfage charges on transhipment cargo and reduced wet charges such as pilotage and port dues. Under the new policy, vessels carrying 50 percent or more transhipment cargo are receiving a 50 percent discount on fees, while those with 25 to 50 percent transhipment cargo will qualify for a 25 percent concession. On March 30, in a significant move, the M/V HMO LEADER (IMO 9169811) successfully berthed at Gwadar Port, carrying 35 pieces of general transhipment cargo, which reflects a growing trend of international maritime operators redirecting cargo flows towards Pakistan’s south-western coastline. Gwadar Port is increasingly being recognised for its strategic location and modern infrastructure, offering a haven for transhipment activities as international shipping lines are approaching the port to utilise its facilities. To facilitate this shift, authorities are offering free storage for transhipment cargo, a measure intended to attract greater volumes and boost Gwadar’s regional competitiveness. According to government officials, the port and its integrated free zone have the capacity to handle up to 16, 000 TEUs of containerised cargo, along with 90, 000 square meters. According to a recent report of the Pakistan Institute of Development Economics (PIDE), Pakistan’s port infrastructure is composed of three main ports: Karachi Port, Port Qasim, and Gwadar Port. Each is characterised by distinct operational features. Karachi Port, being the country’s oldest and one of South Asia’s busiest deep seaports in the Gulf conflict, has observed a substantial increase in shipping activities. Approximately 75 percent of the redirected cargo shipments are handled at Karachi port. The increase is also reflected in terms of container volumes at terminals. Karachi port has approximately 11, 000 cargo containers from trans-shipping and about 133 vessel calls in the month of March. This volume is significantly higher than the total handling at the same port during the whole previous year. PIDE’s report further said that Port Qasim is attributed as the country’s premium industrial port. It has a relatively modern infrastructure and plays a crucial role in the country’s trade and economic growth and handles about 51 percent of total coastal trade. This port has significant potential for expansion. During March 2026, following the Hormuz conflict, it handled approximately 25 percent of the redirected cargo shipments in the region. The port has picked up, handling about 4000 TEUs, including more than 900 cargo containers in a single day in the month of March. The overall trans-shipment growth has been approximately 2, 302 percent this time. Port Qasim, despite having expansion capacity and updated infrastructure, faces a few constraints in operational revival due to its upstream location. Gwadar is a warm-water, deep-sea port located on the Arabian Sea touching the doorway of the key shipping routes of the Persian Gulf, just at the exit of the Strait of Hormuz. Given its proximity to established shipping routes and deep-sea capacity, it offers a substantial long-term potential to Pakistan. Gwadar is basically a trans-shipment port yet has the potential to function as a transit port for land-locked countries like Afghanistan and Central African Countries (CAR). During the Gulf conflict, this port marked its entry to the regional trans-shipment network by berthing a vessel. The shipping volumes are still building up in the port, which indicates its strong potential as a major trans-shipment hub for Pakistan. Copyright Business Recorder, 2026

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