It is imperative that we should commence developing the Colombo South Port immediately or face the dim prospect of seeing the Colombo reduced to a mere feeder port, said Jayanath Perera, Chairman of the Shippers’ Council on Friday.

Addressing the Annual General Meeting of the Council held at the Trans Asia Hotel, Jayanath who was elected chairman for the second consecutive year said that within the next two years the new generation vessels of 12,000 to 16,000 teu capacity would be in operation and they would not be able to call Colombo due to draft restrictions. "There will be delays and additional costs. Exports will be uncompetitive in the international markets and our imports and exports will have to be transhipped via other hub ports in the region," he said.

The following is the full text of Shippers’ chief’s speech:

"Within the next two years we witness some of the biggest vessels in operation. The new generation of vessels with capacities of 12,000 to 16,000 TEUs are unable to call at Colombo due to draft restrictions. This would be a major problem when these ships are fully operational. If we do not commence development of the South Port Terminal at least now, Colombo becoming a mere feeder port is inevitable.

The repercussions are, there will be no direct services to many main destinations from and to Colombo. All our imports and exports will have to be transshipped via other hub ports in the region. This would result in delays together with additional freight costs. Our exports will be uncompetitive in the international markets and consumables will go up in price. All these factors of course will severely affect the economy.

We have seen many changes in the Shipping Industry in the past twenty to thirty years. Whilst some of these changes have brought benefits to Shippers some regrettably could be considered detrimental. The development of mega carriers has given shippers better opportunities to ship their cargo at reasonable rates. At the same time we have also seen mega mergers and takeovers, which have created a monopolistic environment within the shipping industry. Shifting industries from one geographical location to another also had an impact on shipping patterns. We also observe major investments in the development of Port Terminals creating competition to attract more ships. The immersing economies of China and India have also contributed a significant influence due to the large import, export volumes. We are aware that India with her rapid industrial and economic growth has already commenced development work on their main port terminals. In fact terminals are nearing completion and would certainly attract main lines if we fall behind in the development of our port.

The Port of Colombo, as we all know is in a strategic preferred location. We have merely enjoyed the benefits of this aspect for decades without doing much. The question is can we remain where we are only highlighting the location of our Port.

It is an accepted fact that more than 70% of our shipping volumes represent transshipment cargo from the Indian sub continent. Our low Import and export volumes do not attract shipping lines to call at Colombo. How can we, located as we are, safeguard our hub status?

Within the next two years we witness some of the biggest vessels in operation. The new generation of vessels with capacities of 12000 to 16000 TEUs are unable to call at Colombo due to draft restrictions. This would be a major problem when these ships are fully operational. If we do not commence development of the South Port Terminal at least now, Colombo becoming a mere feeder port is inevitable.

The repercussions are, there will be no direct services to many main destinations from and to Colombo. All our imports & exports will have to be transshipped via other hub ports in the region. This would result in delays together with additional freight costs. Our exports will be uncompetitive in the international markets and consumables will go up in price. All these factors of course will severely affect the economy.

I strongly believe the time has come for all of us to get-together CASA, SLAVO and all directly and indirectly involved in the industry to jointly make representations to the Government to embark on this development project immediately, although we are already late. I consider this to be of the highest priority and need of the hour. Other industry problems may have to wait, as this is urgent.

During the last year our main focus was diverted towards the organizing the Federation of Asean Shippers’ Council & Asian Shippers Council AGMs in Colombo. This event was scheduled to be held in August this year. Unfortunately we lost this prestigious opportunity due to the security situation in the country.

As you are aware there are many other unresolved matters that we have to tackle in the coming year.

Terminal Handling Charges, Pushing for a Regulator for Shipping Industry, Demanding a proper EDI system for Customs clearance, Lobbying for reduction in Port Charges are some of these key issues.