The entire logistic space is transforming due to technological advancement. Sri Lanka needs to keep abreast of these developments, be updated and adapt to emerging trends in the shipping and logistics industry, State Minister of Defence Ruwan Wijewardena said at the opening of the Asia Logistics Forum held in Colombo last week.
“Technology has become the key for development of an industry. The country’s shipping and logistic industry will benefit where technology could improve competitiveness and efficiency, to be an attractive service provider. Sri Lanka also has the advantage of its geographical location and the Bay of Bengal is fast becoming the most strategic centre in Asia,” he said
The Bay of Bengal region is now growing in economic and strategic importance. It argues that the Bay of Bengal needs to be understood as a region with its own particular strategic dynamics and issues. The area is fast becoming a key zone of strategic competition in Asia and is of vital importance to India.
“After decades of neglect, the Bay of Bengal is today reassuming strategic and economic salience. Nearly 1.4 billion people live along its coastline and almost a fourth of the world’s total population calls this region home. The seven countries situated immediately on and around the bay - Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand have a combined GDP of approximately US$ 2.7 trillion and an impressive average rate of economic growth of around 5.5%,” he said.
Sri Lanka maintains excellent relationships with Japan, China, Australia, USA and the EU by maintaining neutrality in the Indian Ocean and the Bay of Bengal. The government while providing the necessary infrastructure facilities has plans to open up the shipping industry to fuel growth and expansion of the sector. The total volume handled by the Colombo port in 2017 was 7 million TEUs while total revenue was around US $ 240 million which is lower compared to other players in the region, he said.
The logistics industry is moving towards different dimensions and is in the process of consolidating. The evolment of the industry has been witnessed in the last 5 to 10 years with corporate acquisitions being the main factor in this regard, Country Manager Maersk Line Zeeshan Mukhi said.
The key concerns of the industry are cost of transportation, fuel efficiency, utilisation, bigger ships, network efficiency, operational excellence, shipping alliance and transshipment. However, the competition is not within the industry. There are 3.5 billion dollar worth of start-ups in the shipping and logistic space. The majority of businesses come from an e- platform and digital transformation is high on the agenda, he said.
There are various areas where digital transformation can be used such as advanced analytics, Internet of Things, artificial intelligence and robotics. All existing players of the supply chain can benefit from e-platform tools where fully fledged on-line transactions take place. Though data analytics is at the forefront of providing information from multiple sources, there is the disadvantage of it not having control over capacity. Therefore, it is necessary to consider supply chain optimization, he said.
“Many ports world over are automated at present. Colombo has the advantage of being in a great location and sourcing low cost of labour. However, by automating, improved efficiency could be achieved while reducing operational cost.
Sri Lanka needs to bring in best practices and be competitive to attract businesses. It needs to have a digital vision and leverage on the good that other industries offer. It is also necessary to be updated on the latest technologies, he said.