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VCTPL stakes claim for box transhipment hub as Sri Lanka crisis cripple Colombo port

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Shri Vaibhavi Logistics

VISAKHAPATNAM : The escalating political and economic crisis in Sri Lanka has paralysed Colombo port after port workers and trade unions struck work forcing the Sri Lanka Ports Authority (SLPA) to suspend navigation services from the evening of 9 May, giving Indian ports and terminal operators a chance to stake claim to become a box transhipment hub, a role which Colombo has been playing for many years.

The latest to make a pitch to the mainline container carriers hit by the developments in Colombo port is Visakha Container Terminal Pvt Ltd (VCTPL) which runs a container handling facility at stateowned Visakhapatnam Port Authority.

“VCTPL has a 1 km quay length with a deep draft of 16 metres plus, along with super post Panamax cranes to handle 3 vessels at a time. Being in closer proximity to Bengal, Andhra Pradesh and Bangladesh markets and well connected by rail and road, it could be an excellent network solution for many carriers including Mediterranean Shipping Company (MSC) and Maersk who depend on Colombo to service the eastern seaboard of India,” said a shipping industry official.

“It is time for global carriers to think out of the box to set up network solutions that are resilient and efficient for origin and destination cargoes,” he added.

Mumbai-based shipping group, J M Baxi Ports & Logistics Ltd, which owns VCTPL, is even “open” to partnering with a carrier to bolster its transhipment claim, a person briefed on the thinking said, asking not to be named. A spokesperson for J M Baxi Group declined to comment on this.

In April, J M Baxi Group bought the 26% stake held by the Dubai government-owned D P World Ltd in the terminal, making VCTPL a fully owned unit.

“Transshipment solutions can be provided at the drop of the hat due to readiness and launch of a brand-new terminal such as VCTPL. This could be a strategic play by liner companies to enhance their footprint on the east by taking up a terminal like this while solving their transshipment needs as well,” the industry official mentioned earlier said.

India has been trying for many years to cut its dependence on Colombo port to send and receive cargo shipped in steel containers, but without much success.

India’s exporters and importers route some 3 million twenty-foot equivalent units (TEU’s) of containers every year through Colombo port where mainline ship operators have pitched a transhipment hub taking advantage of the deep draft and competitive rates for ship calls offered by the island nation.

But the crisis in Sri Lanka is beginning to hurt Colombo port.

“The stoppage of work at Colombo will have adverse effects on imports, exports, and transshipment volumes. This could lead to a loss of confidence as a transshipment hub and shifting of business out of Colombo to competitor ports,” Shehara De Silva, Chairman, Ceylon Association of Shipping Agents, a 135-member group, wrote in a 10 May letter to the Chairman of SLPA.

“Shipping lines (are) being pushed into shifting of services and shipping opportunities out of Colombo to other regional ports with predictability, reliability, and steady and estimable costs of operations. Regaining such service calls to Colombo will take years to convince shipping lines,” De Silva said.

“We are trying to convince the port workers and the trade unions that the port must be run,” a top official at SLPA, which oversees the island nation’s ports said.

“That’s what we are struggling with now,” he said, adding that no ships were berthed at Colombo port on Tuesday. “We are trying to resume operations today,” he added.

Vessels that have completed operations are idling inside Colombo port without being able to sail out. “The consequences of delayed departure results in a huge financial loss for the shipping line, loss of schedule integrity, delayed delivery of cargo and missing berthing opportunities in other ports,” De Silva at Ceylon Association of Shipping Agents, said in the letter to SLPA Chairman.

Vessels that are waiting outside the port are not able to berth and complete their cargo operations.

“Besides, vessels at berth are not able to work productively resulting in delays, additional port costs, inability to load cargo intended for vessels, cost of missed connections and total disarray of the planned schedule of the voyage having far reaching consequences to the ship owners,” De Silva added.

The International Container Terminal (ICTT) run by D P World at Cochin Port and ports such as Chennai, Kamarajar and Kattupalli located near Chennai are also looking to grab the transhipment business from Colombo.

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