Photo: Sri Lanka Ports Authority
Colombo’s increasing popularity as a transhipment hub is heaping cost pressure onto forwarders and shippers on the India-US tradelane, the Sri Lankan gateway’s newfound revenue stream having provoked a worsening tide of congestion.
Recognising India is facing its own congestion issues, particularly at Mundra and Nhava Sheva, CH Robinson said Colombo’s status as a transhipment hot-spot was elevating the risks of rolled cargo.
“When mainline services omit Colombo to recover schedules, South India cargo can miss planned connections even when space is available on the onward vessel. That distinction is particularly important for Tuticorin, Cochin, and Chennai cargo routed through Colombo.
“In these markets, available main-vessel slots are only one part of the capacity equation. Feeder timing, container availability, dwell time during transhipping, and whether the mainline vessel makes its planned Colombo port call determine whether the container can use space,” it said.
Consequently, the forwarder warned, the issue cargo owners were being left to grapple with was not just whether they could secure allocations, but whether the feeder and mainline connections on these routings would hold together.
Much of the congestion Colombo is contending with is a consequence of vessels and services routing away from their traditional transhipment hubs in the Middle East, amid the war between the US and Iran – a situation that seems to have affected US consumers most.
This week, Hapag-Lloyd warned customers of waits of two-to-three days over the next few weeks, “due to yard density of more than 130% of all terminals and bad weather impacts”.
Sources are divided, some telling reporters the issue was “easing”, others that they expect the problem to persist well into October before any improvement, with Exporters Association of Sri Lanka chair Nalaka Ratnayaka adding: “There is no workable solution yet.”
The increases have been marked; in August alone, Colombo experienced a 7.8% year-on-year uptick in transhipment cargo, which now accounts for more than 82% of its throughput, with turnaround times surpassing the six-day mark across multiple terminals.
However, there have been some winners; the likes of Hambantota and India’s Vizhinjam getting in on the transhipment act as carriers seek alternatives to satiate the demands being placed on regional supply chains.