Colombo Port sees fourth consecutive month of declining transshipment volumes

By Nishel Fernando 

Transshipment volumes at the Port of Colombo continued their decline for the fourth consecutive month in August, despite a notable reduction in congestion at the port.

In August, the transshipment volumes handled by the port declined by 1.7 percent year-on-year (YoY) to 510,045 twenty-foot equivalent units (TEUs), slightly recovering from the 6 percent drop recorded in the previous month.
The number of container ships calling at the Port of Colombo also declined by 17 percent YoY to 279 ships during the month.

Overall, transshipment volumes grew by 6.1 percent YoY to 4.19 million TEUs in the first half of this year, driven by double-digit growth recorded during the first four months of the year. This was before the port began experiencing heavy congestion, resulting in significant delays and forcing shipping lines to reroute some of their services.
“The congestion has reduced at the Port of Colombo, resulting in improved productivity. This is partly due to the reduction in the number of ships calling at the Port of Colombo,” a shipping agent told Mirror Business.
He specifically noted that Mediterranean Shipping Company (MSC) reduced its calls at the Port of Colombo, benefiting Indian ports, including Adani Group’s Vizhinjam Port.

Although none of these Indian ports can challenge the Port of Colombo at the moment, there could be long-term consequences for Port of Colombo’s position as the regional transshipment hub.

“It’s no comparison to what we have in Colombo. If this trend continues, it will affect Colombo in the long run. This is just the beginning of the competition,”he added.

Despite the improvement in productivity, it was noted that the work-to-rule campaign by Sri Lanka’s Customs (SLC) Unions continues to constrain activities at the port. Some in the industry view this as an attempt to block the full digitalisation of SLC operations.

On a positive note, overall container throughput at the Port of Colombo bounced back, recording a 1.3 percent YoY increase as the port handled 634,554 TEUs in August.

During the month, import container (laden) volumes were up by 35.6 percent YoY to 51,472 TEUs, while export container (laden) volumes rose by 3 percent YoY to 28,116 TEUs. However, restowing volumes at the port declined by 21.2 percent YoY to 14,394 TEUs. Restowing volumes are typically based on the number of ships and
their requirements.

Meanwhile, the port’s only fully operational deep container terminal, Colombo International Container Terminal (CICT), handled 278,386 TEUs during the year, down by 8.3 percent from a year ago. The Sri Lanka Ports Authority-managed Jaya Container Terminal (JCT) and its partially operational East Container Terminal (ECT) together handled 188,694 TEUs, up by 26.4 percent from a year ago. The container volumes handled by South Asia Gateway Terminal were down by 3.4 percent YoY to 167,474 TEUs in the month.