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
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.