Here's the thing I have a problem with in smuggling: You get FR5'd if caught. As soon as that happens, the character IMMEDIATELY becomes worthless in trading with the faction that FR5'd you. As such, your trade route is dead, and you either have to A: Find a new trade route that has nothing to do with the house/faction you smuggled against, or B: Scrap the character. Scrapping is the last thing on someone's mind who bought a 5k transport. Imo, make it so FR5s aren't usable against smugglers. Just do the old fashioned way of doing things: Bounties. It's much more fun anyway, seeing that smuggler get blown to bits by a hired mercenary.:)
Right now, smuggling is a high-risk, almost same-profit trading system as lawful trading. If you succeed, you get about the same you would for lawful trading (Or at least it seems you do, from what I commonly hear from people). As well, you must avoid many gates/lanes in some cases in order to succeed. Not all pirates will agree with your smuggling either, so you're even more at risk with some smuggling routes. And when that FR5 hits you, *BAM!* you're basically done with that character. And there goes however much the transport cost you down the drain.
TL;DR: Remove FR5s from smugglers caught in the act, as well as boost any current smuggling routes' cash flow (Whatever those might be).