Customs warns KICT of legal action

Pakistan Customs has warned the management of Karachi International Container Terminal (KICT) of possible contempt of court proceedings and legal action over escalating operational disruptions that are delaying customs clearance, hampering trade activity, and affecting overall port performance.

In a letter issued by the Customs Appraisement West Collectorate to the KICT CEO, officials said operational bottlenecks at the terminal had intensified despite repeated written notices and daily verbal and telephonic coordination. Customs authorities reported persistent delays in container grounding, examination processes, and freight clearance over the past several months.

Officials stated that consignment examination largely depends on terminal operator efficiency, including timely grounding of containers, seal removal, and cargo availability. Administrative shortcomings at the terminal have increased cargo dwell time and caused congestion at the port. Customs data shows a continuous grounding backlog at KICT since December 2025.

During July-December 2025, import cargo volumes rose 13.54% year-on-year, while consignment examinations increased by 31.25%. However, the terminal failed to proportionately expand operational capacity, storage space, trained manpower, and cargo handling equipment, according to the letter.

Customs also accused the terminal management of refusing to honour Delay and Detention Certificates issued under Section 14A(2) of the Customs Act, 1969, which officials said constitutes a violation of Supreme Court directives. Several cases recommended by legal forums and the Federal Tax Ombudsman for demurrage relief to importers, remain unresolved.

Authorities further alleged non-compliance with the First-In-First-Out (FIFO) principle in container grounding and examination. Although additional space at the Karachi Port Trust (KPT) West Wharf created capacity to handle around 100 containers daily, only 40-50 containers are being shifted due to security, labour availability, and procedural issues under Rule 554 of the Customs Rules, 2001.

Customs has directed KICT management to immediately eliminate the grounding backlog, strictly enforce FIFO procedures, honour Delay and Detention Certificates, and submit a comprehensive operational improvement plan aligned with rising cargo volumes to prevent further disruption to port trade.

Earlier, the Karachi Chamber of Commerce & Industry (KCCI), while expressing concern over the persistent backlog of nearly 50% cargo at KICT every day, cautioned that prolonged congestion was disrupting supply chains, inflating costs, and undermining ease of doing business.

In a statement, KCCI President Rehan Hanif pointed out that the primary cause of congestion at KICT was the acute shortage of staff, particularly for consignments marked for examination that needs to be raised to at least 25 staffers overseen by two senior officials.

"The examination process at KICT remains excessively slow, resulting in average backlog of around 50% containers each day," he said, adding that frequent rotation of staff further delays the clearance process. He also mentioned that more than 2,000 containers imported under the Afghan Transit Trade, which remained stranded at KICT, was another major cause of excessive congestion.

Hanif regretted that despite the installation of state-of-the-art container scanners costing millions of dollars, which were technically capable of scanning a container within less than a minute, the clearance process remained inexplicably slow. He attributed this to inadequate training of technical staff, lack of awareness of full capabilities of advanced scanners, unavailability of live streaming features and insufficient monitoring personnel.

Referring to a meeting of a KCCI delegation with the chief collector of Customs, the chamber president stated that it was clearly assured, and instructions were also issued, that containers carrying a single item or raw material meant for industrial use would be cleared on a priority basis. However, these directives are not being implemented in true letter and spirit, resulting in unjustified delays even for straightforward consignments critical for industrial production.

He highlighted that the installation of tracking devices on trucks had emerged as another serious bottleneck. "The process of installing trackers on a single truck takes four to five hours, which leads to long queues, delays cargo evacuation, and significantly increases the cost of doing business," he observed, adding that this entire mechanism urgently needed a review.