Transshipment container volumes record modest increase in March despite concerns

By Nishel Fernando
Despite concerns on Sri Lanka’s worst-ever economic crisis spiraling into port operations, transshipment container volumes at the Port of Colombo recorded a modest 5.2 percent year-on-year (YoY) growth in March while import and export container volumes recorded sizeable declines.

The container transshipment volumes increased to 522,178 TEUs in the month while it was up by nearly 7 percent YoY to 1.49 million TEUs in the first quarter. 

Overall, container throughput at the Port of Colombo increased by 2.1 percent YoY to 640,996 TEUs in March and by 5.7 percent YoY to 1.85 million TEUs in the first quarter of the year. In the month, export and import container (laden) volumes declined significantly by 12.9 percent YoY and 25.3 percent YoY to 27,837 TEUs and 41,845 TEUs amid economic crisis.

The Port’s only fully operational deep container terminal, Colombo International Container Terminal (CICT) handled 283,215 TEUs in the month, up by 2.6 percent YoY.

The SLPA-managed Jaya Container Terminal (JCT) and its partially operational East Container Terminal (ECT) handled 196,187T TEUs in March, up by 5.5 percent YoY. However, the container volumes handled by South Asia Gateway Terminal (SAGT) fell by 2.5 percent YoY to 161,594 TEUs in March. 

Late last month, mainline vessel operator Maersk warned on possible delays in flow of transshipment cargo at the Port of Colombo resulting from disruptions to port operations from the economic crisis.

“The economic crisis in Sri Lanka has also led to a buildup of containers in Colombo Port due to major truckload service disruptions. 

Furthermore, the sharp decline of the Sri Lankan Rupee against the US dollar has contributed to the tightening of the foreign exchange market, further disrupting movement of cargo between Indian ports and Sri Lankan terminals,” it said.

Consequently, Maersk has announced plans to divert export shipments out of India’s East Coast ports to West Coast ports such as Nhava Sheva and Mundra deploying dedicated block trains.

In another development, Mediterranean Shipping Company (MSC) is planning to launch a direct service connecting South China and Bangladesh starting from April 27th this year avoiding both Colombo and Singapore.
Local shipping agents opined that the current buildup of containers in Colombo Port is not significant and it remains well within the capacity of the Port.  However, they noted it is natural for shipping lines to be concerned of the development. 

“When containers are stuck in the Port, the shipping lines become reluctant to accept cargo from other origins to the Port fearing delays,” a local shipping agent said.

Meanwhile, Indian port operators are attempting to lure some transshipment traffic from the Port of Colombo. The International Container Transshipment (Vallarpadam) Terminal at Kochi, which is yet to attract mainline ship operators, saw a steep rise in container volumes in March. 

India accounts for 65-70 percent of Port of Colombo’s transshipment volumes. However, local shipping agents said that they were yet to see a notable drop in transshipment volumes originating from India. 

They remain confident of Port of Colombo’s future prospects particularly with regard to the development of West Container Terminal which will be managed By India’s Adani Group and Sri Lanka’s John Keells Group.