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Sri Lanka port in talks on new services
02 Oct, 2009 06:48:32
Oct 02, 2009 (LBO) - Sri Lanka Ports Authority (SLPA) is in talks with international shipping lines on new services through Colombo port despite the global downturn in trade which has reduced cargo volumes, a senior official said.
SLPA chairman Priyath Wickrama said there were signs cargo volumes were picking up as the global economy recovers from recession.

A new computer terminal management system that replaced an aging system has helped increase vessel productivity and win new services for the Jaya Container Terminal (JCT), the SLPA-run main transhipment facility in Colombo.

"We're now talking with a couple of shipping lines to get new services to JCT by the end of the year," Wickrama told LBO in an interview. "It reflects the improved productivity levels and efficiency at JCT."

Growth in cargo volumes in future would have to be handled by the state-run JCT with the privatised South Asia Gateway Terminals, across the harbour basin, having reached saturation.

Wickrama said there was no rate war between the two terminals or competition for clients although the state-run terminal was cheaper after a recent rate hike by SAGT.

"We're promoting Colombo as a port, not individual terminals. We're working together."

Two big shipping lines, APL and Maersk, both clients of the private SAGT facility, recently started services at JCT.

Wickrama said the service by Maersk, the world's biggest shipping line, was a new service that started from September 1 and not business shifting from SAGT.

And APL's service which had been calling at SAGT was won by the JCT when it was about to shift to a rival port.

"APL was supposed to shift from Colombo to Salalah or Dubai," Wickrama said. "Then we had talks with them and gave a competitive offer."

He rejected charges that the state-run terminal gave big discounts to win business from the private SAGT terminal, which is majority owned by the listed John Keells Holdings conglomerate.

"We have a workforce of 13,200 while SAGT has only 600. If we undercut rates below minimum levels it won't help us to survive."

The recent shifts in services meant that SAGT's market share of transhipment volumes has increased against that of JCT.

"But still in domestic import-export volumes we have very big market share," Wickrama said.

"Revenue-wise, domestic cargo is better than transhipment."

Colombo is south Asia's transhipment hub, transferring cargo by feeder vessels from ports on the Indian sub-continent to big mainline ships on the main East-West trade route.

Handling fees for transhipment cargo are much lower than that for domestic cargo.

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