A land route for Iran-bound cargo puts Pakistan on the risk map

A land-side workaround to Hormuz? Pakistan is positioning its ports as a land-side workaround for Iran-bound cargo as Hormuz constraints bite. The government issued a new order mapping out six transit corridors linking Karachi, Port Qasim, and Gwadar to Iran’s Gabd and Taftan border crossings, allowing third-country goods to move into Iran via Pakistan without import duties.

The route isn’t new — but it’s now operational: Islamabad has activated a 2008 Pakistan-Iran road transport framework covering passengers and goods — giving it a formal basis to move transit cargo across Pakistani territory to Iran.

Gwadar is emerging as the corridor’s release valve — where the Gabd border crossing sits two to three hours away, versus the 16-18 hours from Karachi, a gap that could potentially cut transport costs by 45-55%.

The cleaner model may be sea-to-road rather than pure trucking: Pakistani port officials are weighing the use of feeder vessels to move containers from Karachi to Gwadar — roughly 100 km from the Iranian border — instead of dispatching thousands of trucks along the longer overland route. The shift could save around USD 180k in transport costs.

Useful, but not a Hormuz replacement: “Pakistan’s six new corridors to Iran are a pressure valve, not a substitute for Hormuz. Pakistan has notified the six land routes to move Iran-bound cargo off its congested ports. They help clear a backlog, but are not designed to replace seaborne trade through Hormuz,” Wolfgang Lehmacher, former head of supply chain and transport industries at the World Economic Forum, tells EnterpriseAM.

An enable workaround? “Recent reporting framing this as Iran ‘replacing UAE ports’ probably overstates the shift — I’d say that this looks more like a politically enabled workaround under current constraints than a structural rerouting of established Gulf transhipment flows,” Antonella Teodoro, senior transport consultant at MDS Transmodel, tells EnterpriseAM.

Gwadar can help, but the ceiling is low: “Gwadar has just shown it can handle around 11k containers in a month — more than its entire 2025 total. That capacity is material for Iran-bound relief flows, but remains small compared with established Gulf hubs,” Lehmacher says.

Sanctions still cap the upside: Financial restrictions and limited trade channels keep flows constrained, even as transit opens. Essential goods can move under humanitarian exemptions, but currency access remains the chokepoint.

The constraint is still inland: “The Gwadar-Gabd corridor may offer a geographically efficient routing, but sanctions exposure and inland logistics constraints are likely to keep it niche rather than transformational at least in the near term,” Teodoro adds.

Why it matters: The new route gives Iran a land-based alternative as maritime routes remain constrained. With more than 3k Iran-bound containers stranded in Karachi since the blockade began, the success of this corridor hinges on how efficiently Pakistani customs can process new flows.

The risks are built in

No corridor without cover: Iran-bound cargo must be backed by an encashable bank guarantee equivalent to Pakistan’s applicable import levies — giving Islamabad a financial safeguard if goods are diverted into the local market instead of exiting into Iran.

No US sign-off? Islamabad appears to have opened the corridor without consulting the US — raising political risks as much as operational ones. By creating a land-side route for Iran amidst a US-backed maritime squeeze, Pakistan risks scrutiny if the corridor is seen as diluting pressure — including potential fallout for its banking sector’s access to correspondent networks.

Islamabad wants the corridor upside — but carefully: “Pakistan is taking a calculated risk: leveraging its position as a land corridor to ease Iran-bound trade while trying to stay within the bounds of its relationships with the US and the International Monetary Fund,” Lehmacher argues.