Container transshipment business at Sri Lanka’s Colombo port has been hit by lockdowns in India and Bangladesh over Coronavirus and vessel calls are expected to decline as lines try to balance demand, a logistics official said.
“About 55 to 60 percent of our total volumes come from India and Bangladesh,” Romesh David, Chief Executive of South Asia Gateway Terminals told an online forum organized by Advocata Institute, a Colombo based think tank.
“With the closures of them now we see the trickle through in both ways. Imports have fallen off and as have exports.”
Though ports have been functioning throughout Coronavirus lockdowns and curfews, the industry is hit by demand drops and transport issues.
“This is also reflected now in vessel calls as lines try to balance this demand drop through matching the supply through blanking out sailings,” David said.
“We see an approximate 20 percent of sailings blanked out on a rolling basis. I think we will see more of that happening in the months ahead as well.
“If the lines are unable to match this supply in order to keep rates reasonably stable we are looking at about a 23 billion (dollar) loss which effectively takes away about eight to nine years of their earnings in one shot in this year alone.”
“From a lines perspective, the forecast is indicative that over the next 12 weeks we will see a reduction in demand which the lines will correspondingly try to match with supply on anything in the order of 20 to 30 percent of historic capacity,” he said.
He said that volumes were largely flat in the first quarter, with a minor drop of 2 percent. With thin the first 15 days of April, there was a 20 percent drop in volumes across the board.
As of last week, Colombo port held over 40,000 TEUs (twenty foot equivalent units) stuck within creating massive operational issues.
David also said that in local context Sri Lanka will face difficulties in moving goods in and out of the port despite continuous operations.
“Looking forward, one of the things that we will see is a certain tightness of space for exporters because frequency Westbound will undoubtedly be tempered.”