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Colombo port dependent on transhipment traffic bulk of it from east coast ports of India

Colombo has become South Asia’s topmost ‘container transshipment’ hub, handling 4.35 million Teus during 2016 an increase of over one million TEUs over the previous year. Indian ports particularly in the east coast provide the bulk of the containers though Colombo claims it is only 30 per cent of the total transhipment traffic according to Sri Lanka media reports

Our Transshipment volumes have been the main reason for Colombo being a must stop for the top 20 lines. This has presented an opportunity for shippers to reach and compete in international markets. Without this advantage of transshipment volumes, the connectivity and reach available to Sri Lanka would be much lower and costs higher.

The Chinese-run Colombo International Container Terminals (CICT) has increased port capacity and throughput significantly; handling over 2 Million TEU’s in 2016 and has received some of the largest vessels plying the Asia Europe routes. Credit should also be given to the infrastructure investments by the Sri Lankan Port agency in building the breakwater and providing the platform for such world class facilities to emerge.

Sri Lanka is expected to attract an increasing share of trans-Indian Ocean trade as well. According to estimates by KPMG, the Asia-Pacific freight industry is set to grow at around 12 percent each year, and the Port of Colombo already seeing around a 15 percent annual growth in transshipments. Sri Lanka has a strong feeder network covering major ports of India, Bangladesh, Pakistan, Maldives and Africa.

The major growth areas in transshipment could be to Africa and the Gulf, and also from the East Coast of the Indian subcontinent, Bangladesh and other Indian ports which presently only do approx. 30 per cent of their trade via Colombo Hub, the rest been done by services covering Singapore and Malaysian hub ports. The share via Colombo can only be increased by concerted efforts to improve the product and also by ensuring that Sri Lanka as a hub is more customer focused.

Shippers also have the benefit of lower freight rates available in Sri Lanka compared to many other countries as the rate is inclusive of THC for quite some time. Although this should help shippers be internationally competitive with their exports, there has not been any significant increase in exports. In fact, the earnings from exports have fallen from 11.1 M in 2014 to 10.3 M in 2016.

Driven from the growth of the shipping industry, shipping related infrastructure has developed significantly; from container yards and warehousing facilities to efficient transportation systems, which have all made shipping more connected and efficient today.

 According to figures from the Central Bank of Sri Lanka (CBSL), the transportation sector (mainly shipping related) accounted for 11.6% of the country’s total GDP in 2015, generating LKR 1.3 trn ($8.1 bn), up 1.6% from the year before.

Sri Lankan exporters need to make use of these advantages available to promote their products in international markets. The shipping and maritime community will continue to play its part in helping shippers leverage on the strengths of our strategic position.

Colombo port is ranked 33 among the top fifty containers ports of the world as per Alpher Lines research.

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