Colombo Port volumes decline on global slowdown
Colombo Port volumes have recorded a drop and the Jaya Container Terminal (JCT) in particular has found some of its business shifting out to other terminals as a result of the delays in entering agreements with shipping lines and the imposition of a new tariff.
The Port of Colombo recorded a drop of 2.2 per cent in volume for the first eight months of this year amounting to a loss of 106,760 TEUs.
The fall is driven primarily by domestic volumes which reduced by 10.39 per cent year-on-year on the back of Sri Lanka’s economic woes and a drop of 0.8 per cent in transshipment volumes, which is a factor of the global slowdown.
The general slowdown is attributed to the fall in consumption in Western Europe and the US coupled with continuing lockdowns and closures in China.
This is said to be causing a drop in container volumes and quite dramatic drops in spot freight rates across all major shipping lines on these trades, South Asia Gateway Terminal (SAGT) CEO Romesh David told the Business Times.
The JCT operations were the hardest hit with volumes dropping by 144,778 TEUs in the first eight months that was a significant loss of 9.8 per cent in volumes. August alone recorded a drop of 21.4 per cent in volumes which was a loss of 42,441 TEUs.
SAGT also recorded a drop in cumulative volumes for the first eight months at 12,407 TEUs that indicated a 1 per cent drop. However, August recorded a 10.5 per cent increase in volumes gaining by 15,010 TEUs.
Colombo International Container Terminal (CICT) recorded an increase of 2.9 per cent for August gaining by 7,300 TEUs hitting a total volume of 261,557 TEUs. The terminal also recorded an increase in the first eight months as well of 2.4 per cent in volumes gaining by 50,425 TEUs.
Authorities are said to have changed the tariff at the JCT increasing it to the same level as that of the other two terminals. This resulted in a number of vessels shifting to the other two terminals that would provide an improved service and better facilities.
The arbitrary decision to increase the tariff by the relevant authorities had raised an eyebrow among the terminal staff who have reported to have heard the Chairman query “Do you ask the passengers before increasing bus fares?”
In fact, the Terminal Service Agreement (TSA) entered into with one shipping line had not been signed for at least seven months. These agreements are usually entered into annually between the terminal operator and the shipping lines and prior to signing these they would consult all stakeholders concerned before increasing the tariff.
However, former SLPA Chairman Dr. Prashantha Jayamanne said that they were positive about the growth momentum and attributed the decline in volumes mainly to a 2-day strike.
Others in the shipping industry said the exports out of China have also reduced and this has caused a major impact on the volumes at the Colombo Port.
And with the easing of cargo from China there is now more space causing rates to decline further, it was noted.
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