Sri Lanka presents a lot of strength and opportunity for transhipment of container cargo, but there is a lot of competition coming with many countries looking inward or for direct services.
This is not an immediate threat for the country, but it is a development that Sri Lanka must watch out for, remarked Gateway Media Editor-in-Chief Ravi Ramprasad, presenting a Container Market Report for the South Asia region.
Ramprasad was speaking at the inauguration of the Colombo International Maritime and Logistics Conference last night, where he pointed out that there remains significant potential to enhance intra-regional trade, as shipping within the South Asian region amounts to just 5%.
Elaborating further on transhipment cargo, Ramprasad said some Indian companies have begun shipping cargo from its west coast to the east using trains, which give them significant savings in terms of time. Bangladesh too is considering direct connections through their European trade partners, so Sri Lanka must factor these developments into its plans, Ramprasad said.
Chief Guest Shipping Ports and Aviation Minister Nimal Siripala De Silva, who averred that whilst many countries have moved to privatise their ports, Sri Lanka is taking a measured approach in order to safeguard all those engaged in the sector.
“When you are a small country, there are many people who try to control you and set boundaries and conditions, which is why the Government must come in at times and protect its industries. We believe we are on the correct path. Whilst we have worked to digitalise many aspects, there is still a long way to go and the Port Community System should come online soon.
“The Cabinet has approved plans to make the Trincomalee harbour an industrial port. Galle will be developed into a marina to attract tourists, and we are evaluating proposals in this regard. Indian assistance is being sought to improve the Kankesanthurai harbour. So we will leave no stone unturned,” Minister De Silva stated.
He conceded that Sri Lanka at times has been too traditional in its approach, but there is renewed optimism to compete with ports like Dubai, Singapore and Mumbai, and sought the support and partnership of the private sector for this purpose. Governments need to get out of business, he said, adding that only one terminal in the Colombo Port is State-owned.
The West Terminal will be open later this month he revealed. Political stability is imperative to development, and Minister De Silva said President Wickremasinghe has the courage and vision to provide the necessary direction.
Guest of Honour Foreign Minister Ali Sabry said Sri Lanka for long has bandied the card of strategic location in its maritime business, but the time has come for adding further value. He said it is important to relook at regulations and ensure everything we do is designed to invite people rather than send them away.
“The problem often is with marrying expertise of the private sector with the bureaucracy, and sometimes pseudo nationalist sentiments have often blocked pragmatic solutions and investments,” Sabry said.
The Foreign Minister too opined that the Government should take their hands off business and just be a facilitator, but a mechanism is needed for better sharing of knowledge to get the job done.
During the discussion, it was revealed that container handling in the South Asian region is expected to grow by over 2 million TEUs up to 2026, and Sri Lanka is leading the pack with port expansion. Freight rates have come down since the historic highs recorded during the pandemic, but they remain at about 150% more than pre-pandemic rates, it was said.
