Space crunch in Colombo Port hits trade

by Lalin Fernandupulle

The space crunch experienced by shippers to European countries is due to some main liners either partly or fully withdrawing their services to Europe. The total export trade lost is around 600-650 TEU space per week to Europe, said Sri Lanka Shippers Council Chairman Jayanath Perera.

He said the space crisis has created a severe demand for shipping space resulting in an increase of freight rates to US $ 300 per TEU.

Hanjin Shipping which operated two services to Europe has pulled out one. K. Line and UASC were Hanjin's joint partners. Norasia Line withdrew its weekly service to Europe.

Zim Line was its joint partner. Maersk Line introduced a change in its route and its European vessel operates the UK trade giving preference to garments, Perera said.

He said congestion and delays at the Colombo Port have arisen due to inadequate infrastructure facilities and that work on the Colombo South Harbour Expansion Project should commence without delay.

"The neighbouring states have developed their ports and many shipping lines in Europe trade prefer to call on those ports which are equipped with better facilities than the Port of Colombo," the Chairman said.

He said the Jawaharlal Nehru and Cochin Ports in India have developed tremendously and they pose a severe threat to the Port of Colombo.

India developed its ports three years ago but we have failed to take any steps to develop our ports and we are on the brink of losing our hub status.

The development of the South Expansion Project is making some progress but it should have been launched three to four years earlier. We need to find innovative ways such as a dry port concept with a road connecting to the Port to handle congestion and reduce the time spent on container cargo clearance.

He said with the Colombo South Harbour Expansion project to be completed in 2010 the problem of congestion and delay will worsen and have an impact on freight charges. The time spent on end to end container cargo clearance averages around 24-36 working hours.

The delays in container and truck turnaround have increased from an average two hours in 2004 to eight hours this year due to the congestion and land restrictions.

The truck turnaround time is the time taken to reach the Port container transport entry queue at either the De Saram entry point going up to Hettiyawatte-Kotahena and beyond or at Ingurogoda Junction, Grandpass beyond the Sugathadasa Stadium to enter the Port of Colombo and proceed to either the Jaya Container Terminal run by the Sri Lanka Ports Authority or the South Asia Gateway Terminal which is privately operated, entering the terminal, loading the container, exiting the Port of Colombo container exit point at Ingurukade gate junction.

The Colombo South Harbour Expansion Project should be a priority and not delayed due to political changes, Jayanath said.

Country Director Asian Development Bank (ADB) Richard Vokes said proposals for the first terminal are due to be submitted by early June and the ADB loan will be effective when the Government completes evaluation and selects the preferred bidder by early July.

The ADB granted a loan of US$ 300 million to develop the harbour infrastructure.

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