Global changes create huge challenge to Asian ports: SLPA Chairman

SLPA-chairman-parakrama

Oct 03, 2017 (LBO) – Sri Lanka’s Ports Authority Chairman Parakrama Dissanayake says Global macroeconomic changes have created a huge challenge to the Asian ports.

Speaking at a seminar organized by the Chamber of Commerce, Dissanayake said that port and shipping thrived in Asia under a simple business model in the past.

“The production was taking place in Asia, only because there was consumption taking place in the US and the West. Therefore, the production was outsourced into Asia,” Dissanayake said.

He highlighted that the outsourcing model into Asia had been challenged due to increase in cost in Asia, loss of employment in the US and Europe and the adverse situation pertaining to the creation of new employment in the developed world.

“This model is changing and has changed, to near-shoring and re-shoring which is placing a huge challenge to the carriage of goods by sea, out of Asia.”

There is a growing interest in Trump-led US to bring manufacturing back to their shores or re-shoring.

However, near-shoring or moving operations to nearby countries, is becoming increasingly popular as a more economical, practical alternative to offshoring.

Dissanayake said due to the huge investment required, Asian ports had to be ‘Demand Driven’ and the ports in Sri Lanka were ideally positioned to seize opportunities, provided it continued to create the competitive advantage required in the changing global environment.

“We need to understand that the demand for the carriage of goods is a derived demand and it is derived out of demand for trade. Ports & Shipping have to follow trade.”

Ports Authority Chairman made these observations at a recent presentation on the Hambantota Port and the Industrial Zone.

Several experts and professionals in the maritime business transportation expressed views through presentations at the seminar.