2 August 2024 12:20 am Views - 239
Sri Lanka’s export sector is reeling from severe inefficiencies in shipping and Customs operations, threatening earnings and shaking the confidence of exporters, according to the Free Trade Zone Manufacturers’ Association (FTZMA).
Private sector stakeholders have voiced their concerns, highlighting that even companies under the Board of Investment (BOI) are affected. The FTZMA noted that the lackluster performance of officials in shipping and Customs has exacerbated the difficulties exporters face in dispatching their shipments.
“Exporters are facing difficulty in getting containers for exports due to prolonged delays in clearing import cargo, thus leading to a scarcity of containers needed for exports,” the FTZMA said in a letter to Additional Director General of Customs (Revenue & Services) Seevali Arukgoda this week.
Congestion in ports has led shipping lines to roll over or refuse export cargo bookings. The FTZMA emphasised that the disrupted flow of goods is causing bottlenecks, impeding the movement of products from suppliers to end customers, eroding customer trust, damaging brand reputations, and ultimately resulting in lost business to competitor countries.
Despite a recent meeting between FTZMA officials and Customs to address BOI enterprises’ concerns, the situation remains unchanged. Entities are experiencing constant delays in clearing less-than-container load (LCL) cargo from port warehouses, often taking up to two weeks from the day of de-stuffing. Significant delays also occur in de-stuffing LCL cargo after the arrival of import containers.
Although the trade union action at Sri Lanka Customs has ended, importers still face undue delays of 10 to 14 days in clearing goods due to customs backlogs, capacity constraints, and workforce shortages.
Customs is conducting 100 percent physical inspections on import cargo without utilising the Authorised Economic Operator (AEO) system to verify the legitimacy of importers, regardless of whether imports are raw materials for BOI enterprises or merchandise for domestic consumption, the FTZMA said.
The Association also reported a sudden increase in haulage costs, as trucking companies are arbitrarily raising transport rates due to ongoing port delays, despite rates being regulated by the ACTDO tariff.
The FTZMA criticised the majority of officers at Customs and the Sri Lanka Ports Authority (SLPA) for their lethargic attitudes and resistance to change.
“They are often becoming utterly rude and an absolute disgrace to their homeland. We know that attitude change is difficult, but it can be done and takes time,” the Association stated in its letter to Arukgoda, emphasising the need to address these concerns promptly to mitigate further disruptions and financial burdens from increased storage costs and tied-up working capital.