Indian Bypass

June 28, 2007 (AFP) – Sri Lankan exporters are being squeezed as fewer container ships heading west call into Colombo, with global shipping lines moving more business to India and its booming economy. Both projects have been delayed for over a decade because of poor government policy and analysts fear that further delays could see Colombo lose its hub status. Shipping costs have soared nearly 600 dollars for a standard 20-foot container (TEU) over the past six months as a result, compounding problems for Sri Lankan exporters who compete on price, innovation and time with their large northern neighbour.

“Some of the bigger shipping lines have changed their schedules over the past six months and the crisis is affecting exports of garments, tea, rubber and coir (coconut fibre),” said Sri Lanka Shipper’s Council chairman Jayanath Perera.

Clothing, which accounts for more than half of the island’s near seven billion dollar export trade, is especially feeling the heat as exporters face tight deadlines from buyers such as Victoria’s Secret, Gap, Nike and Marks and Spencer.

“The next alternative is to airlift shipments but that costs 75 percent more than sea freight. Air freight is not an option