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 Post subject: India trade boom boosts Sri Lanka transhipment traffic
 Post Posted: Tue Jun 19, 2007 8:26 pm 
India trade boom boosts Sri Lanka transhipment traffic

Container volumes at Colombo increased by 26 percent in the first quarter of this year, with more than three-quarters being transhipped. SAGT operates round-the-clock, with none of the usual breaks for even May Day, or for meals, and has introduced performance-backed incentives for dockers and changed operational procedures to enhance terminal capacity.

@ FreshPlaza, Netherlands
June 19, 2007


South Asia Gateway Terminals (SAGT), Colombo Port's privatised container facility, aims to handle 1.6 million containers by the end of this year, as India's bulging trade volumes increase the flow of cargo through the harbour.

SAGT's new chief executive, Steven Edkins, believes Colombo will retain its status as South Asia's transhipment hub despite the expansion and recent cuts in tariffs in Indian ports and direct calls there by shipping lines.

Beyond Capacity

In May 2007, SAGT container throughput, measured in Twenty Foot Equivalent Units (TEUs) increased 9.1 percent year-on-year to 118,602.

"Demand is largely from the Indian sub-continent," Edkins, who has over 30 years experience in ports and container shipping having worked previously for P&O, said in an interview.

"We're aiming to improve berth use that'll allow us to accommodate the increasing number of customers."

SAGT handled 1.3 million containers in 2006, much higher than the one million boxes it was originally designed for.

Container volumes at Colombo increased by 26 percent in the first quarter of this year, with more than three-quarters being transhipped.

SAGT has bid for the first container terminal in the new South Port, along with its equity holder John Keells Holdings in partnership with the holding company of Malaysia’s Westport.

New Terminal

The terminal bids also attracted interest from conglomerate Hayleys in partnership with Carson Cumberbatch, the CMA-CGM shipping line and the Asian Development Bank's private sector arm.

The ADB is also funding most of the infrastructure work on the new port.

Other bids for the container terminal have come from Port of Singapore Authority in partnership with conglomerate Aitken Spence, and sole bids from Hutchison Port Holdings, the big terminal operator in Hong Kong, and Hanjin Shipping.

SAGT operates round-the-clock, with none of the usual breaks for even May Day, or for meals, and has introduced performance-backed incentives for dockers and changed operational procedures to enhance terminal capacity.

Tissa Wickramasinghe, SAGT's General Manager – Marketing, said they expect transhipment to go up to 80 percent of Colombo's total throughput by end-2007 from the present mix of 76 percent transhipment and 24 percent domestic cargo.

Maersk, the world's biggest shipping line, is Colombo's biggest customer moving some 750,000 TEUs a year, through both SAGT and the state-owned Jaya Container Terminal.

SAGT's other main customers include big lines like MSC and APL.

All the top 10 major shipping lines and alliances in the world are calling Colombo.

Emirates Shipping recently started a service through SAGT and a joint service by APL, MOL and Hyundai is set to start in June.

Regional Presence

Despite its strategic location, Colombo handles less than a quarter of the Indian sub-continent's transhipment volumes.

And with an increasing number of shipping lines making direct calls to Indian ports, Colombo's transhipment traffic is not growing at the same pace as the growth in Indian cargo.

Colombo is considered ideal for services to Europe and the US east coast.

But for Far East cargo from the Indian sub-continent, Singapore is a better located transhipment port, so large volumes go there. Much cargo for the Middle East goes via Salalah in Oman.

India has embarked on a major ports modernisation drive and its main ports have slashed charges to woo international shipping lines to transport its booming cargo volumes.

However, Edkins sees no threat to Colombo's transhipment business by the increasing number of direct calls to Indian ports, nor by India's port expansion and reduced charges.

The direct calls by shipping lines to Indian ports are not enough to cope with Indian cargo volume growth, he noted.

Natural Bounty

Indian ports can handle only smaller size ships compared with the bigger, deep-draft mainline vessels Colombo handles.

With the building of the new South Port, Colombo will be able to accommodate even bigger ships now being deployed on trade routes or in the design stage.

"The key issue is the turnaround times for cargo ships," Wickramasinghe said, pointing out that Colombo, unlike most Indian ports, is not subject to tidal changes.

"This means there's no waiting time for ships for the tide to come in and go out, which adds to their costs.

"So we're confident that if we keep on delivering good productivity levels and also build the South Port without delay, we can retain the transhipment business."


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