Shipping companies are threatening to scrap their Pakistan services after the South Asian country increased tariffs at its largest port in a blow to an industry that is already grappling with global overcapacity and low freight rates. Hyundai Merchant Marine Co. is “seriously considering” dropping deployment of larger vessels in Pakistan, the South Korean company wrote in a letter to the Karachi Port Trust, a copy of which was obtained by Bloomberg and confirmed by the firm. Local agents, representing global sea carriers including Maersk Line, the world’s biggest container carrier and part of A.P. Moeller-Maersk A/S, and American President Lines Ltd., say the tariff increase has caused distress among members. Charges at Karachi have more than doubled for many types of vessels, according to Pakistan Ship’s Agents Association, after the operator on Aug. 29 removed a cap on tariffs for vessels heavier than 45,000 gross registered tonnage. In an operating environment that saw South Korea’s largest box carrier Hanjin Shipping Co. file for bankruptcy about two months ago, the industry is finding little room to absorb cost increases. “This revision causes a significant cost increase to all the carriers,” Kyounguk Lee, Hyundai’s then chief operating officer, wrote in the letter. “Port cost increase as well as extremely low ocean freight forces us to seriously consider” to drop services calling at Karachi port “in order to minimize our loss,” he wrote. To understand the impact of Hanjin’s bankruptcy, click here A Hyundai Merchant ship of 94,511 GRT for a two-day stay at Karachi will have to pay $82,905, which is 77 percent higher than India’s Nhava Sheva port and 51 percent more than Sri Lanka’s Colombo port, Lee wrote. The higher tariff comes weeks before billionaire Li Ka-shing’s Hutchison Port Holdings is due to start commercial operations of the nation’s deepest port called South Asia Pakistan Terminals Ltd. Hutchinson’s new $1.4 billion port in Karachi, to be inaugurated by Pakistan’s Prime Minister Nawaz Sharif next month, will also have the higher tariffs. The order “has caused anguish and distress to our members,” Amir Ali Jamal, secretary general of Pakistan Ship’s Agents Association, wrote in a separate letter to the Karachi Port Trust on Oct. 31. The agents estimate that the new tariff would increase local port dues by 15.5 percent to 118.2 percent for vessels having GRT of 45,000 and 65,000, respectively. The port faces an annual loss of as much as $5 million per vessel if any major shipping line decides to skip Pakistan, said Muhammad A. Rajpar, who is a former chairman of Pakistan Ship’s Agents Association. To learn about billionaire Li’s plans for Pakistan, click here A spokesman for Karachi Port Trust said the authorities withdrew a cap that did not exist anywhere in the world, adding the port has clarified to all users that this is not an increase but restoration of old charges. He said he wasn’t aware of the letter from Hyundai. “We are going to have big ships calling at the deep-water port,” he said, referring to the new Hutchison port. “If this cap remains, what dividend the calling vessels would offer us?” The port users have asked the authorities to review the tariff. Hyundai Merchant is in talks with Karachi port officials, a spokesman for the company said Nov. 7. State-owned Pakistan National Shipping Corp. is also negotiating with port authorities, Chairman Arif Elahi said.