Industry expert says:

Suez canal expansion may benefit SL

The Suez canal expansion at a cost of over US $ 8 billion was completed recently. The Egyptian Army supervised the construction work. For one year, 400 private companies and 25,000 workers were mobilized to work on the project. They extracted over 260 million tons of sand, built a 35-kilometre channel and widened and deepened 37 kilometres of the original canal.

The Suez canal expansion, according to industry expert and CEO, Colombo Shippers’ Academy, Rohan Masakorala, will benefit shipping companies and ship owners immensely, as it will facilitate port connectivity between Asia (Far East) and Europe, Africa and the East Coat of the USA more efficiently and transit times between the continents will decrease.

In the past, there was a waiting time up to 18 hours as ships could sail only one way at a time. Today, ship traffic can move both ways at the same time and the transit time within the canal too will improve from 16 hours to 11, resulting in a near 24-hour faster movement of ships plying on the East-West shipping route, he said.

Second, the canal expansion was a necessity as ships were getting bigger, now that it is completed, the largest ships can operate via the canal safely, which is good news for ship operators.

The operation capacity of the canal is expected to double by 2023.

As for traders, it will help them transport cargo faster and more efficiently. Hopefully, fuel cost reductions due to canal improvements will be reflected in the freight rate, thus the shipping industry could perform better creating a ripple effect, he said.

“We too can benefit by the Suez canal expansion, as Sri Lanka is one of the last ports of call before ships depart to Europe and the West. If Colombo is efficient, more shipping lines and services will call, as it is the ideal port to increase transshipment in this part of the world. More ships would mean better connectivity for exports and more competitive freight rates and the entire sector would benefit.

The government must focus on this aspect and make sure the country gives the best in service, quality and work on a national policy to attract more main line callers to Colombo and other Sri Lankan ports. It is also necessary to take measures to develop the regional ports in the country to handle the capacity increase due to more ships calling at Sri Lankan ports. As a result the logistics industry too can improve, Masakorala said.

 - SJ