Global maritime and logistics confab highlights opportunities for Sri Lanka.
Daily FT: 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, 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.
“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.
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.
The maritime industry is one of the fastest growing industries in Sri Lanka. The country’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have all helped the expansion in Sri Lanka’s maritime industry, especially in the ports, shipping and logistics sectors. The growing activities in Sri Lanka’s key ports are indicative of the growing business potential in the industry. However, Sri Lanka’s close proximity to the international maritime routes and the expanding manufacturing and exports industries in the country have opened up business/investment opportunities in the uplifting and development of the industry which includes the development of supplementary infrastructure facilities. Introduction of technology and technical expertise are also areas that have opened opportunities in the maritime industry. Foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka’s maritime industry given the fast evolution in the global maritime industry and Sri Lanka’s unique positioning.
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