Shipping trade goes through tough time
The global shipping trade is experiencing a stormy time due the
current economic slowdown, affected by the EU and the Middle East crisis
with a weak US market. One of the most affected trade lanes is the
EU-Asia and U.S Asia trade and freight rates have been very volatile
with lower volumes and more ship capacity in the sector, said Shippers’
Academy CEO, Rohan Masakorala.
International maritime experts have forecast a challenging time for
the global shipping trade owing to the slump in the US and EU economies
which is adversely affecting the maritime trade.
The world shipping industry is also faced with challenges such as
capacity oversupply which hounds the sector. Shipping associations have
forecast a four percent GDP growth this year, similar to 2011.
Masakorala said that due to the global economic downturn shippers
face many challenges such as sudden rate increases which in most cases
are not transparent and does not reflect market conditions. As a result
shippers face difficulties in establishing stable freight contracts.
“Already the industry is hit with high fuel surcharges and will have
pricing problems across the board to manufacturers, retailers and those
in the supply chain”, he said.
Regional competition will keep the demand for better services and
competitive pricing on top of the agenda in the port business.
Productivity is the key factor to overcome this situation. Sri Lanka has
to do more to attract business to our ports. The slow growth of the
Indian economy too can affect Sri Lanka's transshipment volumes.
However, with the acceleration of port development in the country
trade volumes are expected to grow.
The expansion of the Colombo South harbour, the development of the
Hambantota port and many similar projects in the offing will be a boost
to the shipping trade, experts believe.
Sri Lanka's shipping trade volume is around four million TEUs
throughput per annum and around 70-75 percent is transshipment trade.
Growth in transshipment trade has been slow but shippers are confident
that with the completion of the new South harbour large vessels will
call at the port and attract more revenue for the industry.
“The Colombo port is restricted in handling a large number of ships
until the South Harbour Terminals are in operation. Port congestion will
ease when the Colombo and Hambantota ports add capacity by around 2013”,
Masakorala said.“The role of the Shippers’ Academy is to provide
training and improve human capital capabilities. Creating a
knowledgeable workforce will always add to productivity and increase
competitiveness. The Shippers’ Academy will develop course to suit the
needs of businesses in international trade”, Masakorala said.
The Shippers’ Academy was launched in January 2011.