Lanka should develop hinterland connectivity - Port experts

By Lalin Fernandopulle

Sri Lanka should focus on developing feeder operator and hinterland connectivity with mega carriers coming on stream, said panellists at a seminar on ‘Changing Dynamics of Logistics and Transport with the Advent of Mega Ships’ organised by the Chartered Institute of Logistics and Transport Sri Lanka (CILT) recently.

They said that Sri Lanka has facilities to handle mega carriers with the infrastructure and support system which is on a par with other large ports in the region. Sri Lanka is positioned in a strategic location which should be exploited to boost business in the ports and shipping sector. Sri Lanka's port sector development has been expedited with the rapid progress of work in the Colombo South harbour project and the commissioning of the bunkering facilities at the Hambanota port.

Hambantota will be a logistics and manufacturing centre and is being developed into a free port similar to Singapore.

The Colombo Port handled around 4.4 million containers last year.

Port sector experts said that Sri Lanka will be a transshipment hub and compete with other ports in the region. Around 80 percent of cargo coming into Sri Lanka is transshipment cargo.

Sri Lanka Ports Authority, Managing Director, Capt. Nihal Keppetipola said that hinterland connectivity must be developed to enhance the benefits of mega ships. There should be more operations done outside ports. Less trucks coming into ports will help save time and cost and improve competitiveness in pricing and productivity levels.

Feeder networks will be improved with demand from mega lines increasing. Around 20 mega lines carry around 84 percent of the world's cargo volumes. There are only a few feeder operators connected to the hinterland, a panelist said.

He said that there are limits to where mega ships could sail. We should attract the mega lines. The SLPA will build another terminal next year.

The need to reduce freight charges was stressed by speakers at the session.

Senior Lecturer, Department of Transportation and Logistics Management, University of Moratuwa, Dr. Indika Sigera said that the demand for bulk ships had grown with airlines taking over passengers. There has been a specialisation in ships in the 21st century due to its lucrativeness.

He said that the number of container ships which increased by around 100 in 1990, increased by around 600 in 2011 with a drop in 2009.

Major dry bulks increased by around 280 and the number of tankers fluctuated. While growth in transport of coal, grain, iron ore and bauxite and alumina has been slow, there has been a decline in the transport of rock phosphate.

Door-to-door transportation cost depends on the ship, containers, terminals and inland transportation which is the highest. Ships account for 23 percent of cost, containers 18 percent, terminals 21 percent, inland 25 percent and other costs 13 percent.