SL ports not marketed efficiently - Shippers' Academy Colombo

Sri Lanka's shipping industry has grown beyond expectations amidst a tough external and domestic environment. The growth in ship arrivals, tonnage and in throughput reached positive numbers by the end of last year.

Considering the tremendous challenges in Asia, and the continuous global uncertainty and economic slow down, the ports of Sri Lanka attracted more business, an analysis of the data of the past three years shows.

This is because we are probably located in the best geography for a shipping hub.

However, we have also the biggest drawbacks in terms of policy, reforms, political and economic uncertainty, and rule of law that has taken us back a few decades.

The country is probably positioned to be better than Singapore or Dubai if it's put on the right track again.

The many views and critical viewpoints and negative sentiments of the SLPA in the recent past should be considered as constructive criticism and an eye-opener to the SLPA.

As a country, the core activities of shipping remains positive making SLPA and its terminal operators somewhat happy and should encourage them to work even harder to retain the growth momentum in the coming year as well.

The Port of Colombo and the SLPA should see new opportunities as trade patterns may change from 2016-2020. Sri Lanka has more to gain than to lose. Increasing port efficiency, offering more services to ship owners, developing new services and canvassing for an increase in frequency by main line operators should be some of our targets for the next five years.

The growth of Sri Lanka ports business is relatively remarkable. As the largest transshipment port in South East Asia, Singapore and many other ports saw its volumes go down. The port of Colombo had a transshipment growth of over 5% in 2016. Colombo terminals do have world-class facilities, and have shown high productivity and can in the future offer capacity and reliability for ship owners.

The only negative numbers are export growth which should be the number one concern and priority for the government and the reduction in vehicle transshipment in Hambantota which is a reflection of the global slowdown.

The freight market remains historically very low from Asia to EU and US, this may slightly change by the end of the year as demand and supply may begin to change over the next three years as indicated by ship order books.

However, the reduction in freight rate revenue is balanced by bunker prices tumbling over the past 12 months. The freight and shipping market volatility since the 2008 global economic crisis continues and the cycle remains unpredictable.

Given the current developments and slowdown in China, this year will be a challenge to Asian ports and the shipping industry, but on the brighter side, India, Myanmar, East Africa are emerging and the US economy is slowly picking up.

Iran coming out of economic sanctions will keep oil prices relatively low over the medium term and as a result consumption in Europe would increase. Lower bunker prices will help shipping lines to mitigate lower freight rates and help generate greater and new business opportunities.

In the current context, globally (without more surprises in fundamentals), the shipping industry will further consolidate over the next five years, freight rates will increase gradually on key shipping routes starting from the end of this year, and the outlook is more optimistic for the next five years.

In this scenario, the local ports industry should think positively and focus on servicing the industry keeping in mind the constant need to be 'globally competitive' and market our ports which is not done adequately.

The government must ensure that a positive environment is created for the country to succeed as a maritime nation.

- Media release