Can country maintain transshipment hub status?

02 Jul '07

3 min read

For the first berth of the new deep draft South Port to be ready by 2009, in order to cater to surging volumes of cargo through Colombo, work must start this year.

Container volumes in Colombo increased by 26 percent in the first quarter of this year, more than three-quarters consisting of transshipment cargo.

Colombo handles 23 percent of Indian sub-continent's transshipment volumes. Now an increasing number of shipping lines are making direct calls to Indian ports.

Far East cargo from Indian sub-continent go through Singapore as it is a better-located transshipment port. Similarly, much Indian cargo destined for the Middle East goes through the Omani port of Salalah.

Bailey also said Sri Lanka had constraints on foreign direct investment, which was not as smooth, fast and easy as in Singapore and Dubai. "The big players, integrated third party logistics companies would want to control the whole of the logistics chain. They don't want little partners."

He said there was a need for changes in FDI rules to attract big players. He also called on the government and trade to simplify trade rules, especially Customs.

Now Customs treat entrepot trade as goods that are imported and exported. Although no duty is charged, such goods nevertheless must go through the "same hassle" of imports and exports, compared with hubs like Singapore where goods are cleared in 10 minutes, said Bailey adding, that the civil unrest had created a bad image for the country.

"Hopefully, this should not last and the industry must be ready when it is over." He stressed that the country needs to focus on a clear strategy if it is to maintain its share in this business, itself, he added.

Fibre2fashion News Desk - Sri Lanka