Sri Lanka’s container transshipment volumes were down 6.5 percent from a year earlier to 525,768 twenty foot equivalent units and was also down from December official data show.
Transshipment at Sri Lanka’s Colombo Port started to surge in early 2023 as Houthi rebels targeted Red Sea shipping in the wake of Israel bombing of the Gaza strip.
Colombo ports transshipment volumes which were around 470,000 to 480,000 a month went over 500,000 a month and touched 562,000 in January 2024.
In January 2025, volumes were still holding above 500,000, though down from 544,266 in December, data published by the central bank show.
It is not clear whether domestic events reduced transshipment volumes in January. Sri Lanka’s shipping minister said in mid-January that several ships had by-passed Colombo amid port clearing delays by Sri Lanka customs.
There were expectations that conditions in the Suez Canal would normalize by March, but renewed hostilities have broken out.
Sri Lanka transshipment volumes are also dependent on Indian economic activity. Any slowdown in India economy in the past had led to falls in Sri Lanka’s transshipment volumes.
Sri Lanka’s Hambantota port is is transshipping vehicles and is in the early stages of container business.
Sri Lanka’s domestic volumes however have continued to pick up.
Container volumes which were around 80,000 in 2023 amid contraction in domestic credit topped 100,000 in July 2024 as the economy and private credit recovered.
Sri Lanka has a high savings rate, allowing foreign reserves to be built and debt repaid, but higher private investment of savings trigger more imports.
Unsustainable imports come when private credit is re-financed by the central bank’s open market operations to push up inflation and potential output denying monetary stability in the process.