Shipping traffic makes headway this year

by Lalin FERNANDOPULLE

Shipping traffic in the Indian subcontinent will grow this year due to the increase in economic growth rates in the region, said CEO Shippers' Academy Colombo and former Secretary General of the Joint Apparel Association Forum (JAAF), Rohan Masakorala.

He said intra Asia trade recorded a noteworthy improvement in volumes and capacity utilisation last year in the backdrop of a modest recovery of the shipping industry.

The Colombo port recorded a healthy growth of over 20 percent year on year and crossed the four million TEU mark by December last year.

Masakorala said logistics contributed over 10 percent to the GDP excluding exports and imports and added that there will be further growth this year due to infrastructure development adding more capacity.

"Sri Lanka should attract better business opportunities in the shipping and aviation sectors but the rising global oil prices will worry the shipping industry", the Shippers' Academy CEO said.

The Hambantota port which handles service and bulk vessels is a landmark project in the country's port development.

Masakorala said when the new port is in full operation, it will be a viable business in the medium to long-term as the country did not have a major facility to cater to bulk shipping services.

Sri Lanka competes with regional ports in speed and effectiveness at delivery. The Singapore, Japan, Malaysia and Indian ports handle a larger volume of global shipping trade.

"Sri Lanka's ports should be competitive and needs a framework conducive for shipping to attract bigger business opportunities and foreign direct investments to the country", Masakorala said.

The Hambantota port has a unique advantage of being positioned at a strategic location for global shipping. The port could attract large vessels being on a global shipping route and boost the economy.

"Sound financial management and strategic marketing is essential to convince service providers to set up businesses not only to service Sri Lanka but also the region", he said.

The Sri Lanka ports sector has immense potential to benefit as a logistics and transshipment hub. The Colombo port with the expansion of the Southern harbour will retain its status as the transshipment hub in the region.

Masakorala said stable policies and easy access to information is vital to attract investors and build confidence in doing business. Investors will not hold on for long if we delay in implementing the reform agenda after being in the back seat for several years.

The Shippers' Academy was set up to impart practical awareness on logistics and global commerce to the industry with the aim to increase productivity and improve competitiveness of local businesses.

Many shipping companies do not yet use modern technology and systems in operations and as a result there are supply chain delays.

"The Shippers' Academy in partnership with Singapore will introduce state-of-the-art techniques of training to improve the supply chain. Skills and knowledge are vital to the country if it is to be a global hub making use of infrastructure", he said.