Shipping review 2011 :

Colombo Port best in region

Sanjeevi Jayasuriya

Colombo South Harbour development in progress

The Ruhunu Magampura Mahinda Rajapaksa Port

The Colombo Port is the most stable and the best port in the region. It needs to attract possible business despite the downward trend in the global shipping industry.

Several mega port development projects launched during the past five years with US $ 237.1 million invested in 2010. In 2011 the investment surpassed this figure and included $ 500 million and the third terminal construction began during the latter part of the year. The port investment is promoted through public-private partnerships (PPPs) in port operation and port infrastructure.

It is estimated that private sectors investment is to rise to US $ 440 million in 2011 to 2013 and a further US $ 2.8 billion during the period of 2017 to 2020.

Many shipping lines are comfortable with the services it offers and the country need to have a strategy to consolidate its position. Sri Lanka needs to focus on capturing the global market as the Asian shipping industry is performing better compared to the rest of the world.

The country expects improved performance from beyond 2010 as strategically located on the main international shipping routes and expects to become a naval hub of Asia. The positioning is advantageous for trade, transport and transshipment activities.

There had been a good growth in container handling and transshipment during the last five years. Container handling is expected to reach 10 million TEUs per annum by 2020.

The maritime industry including the global shipping lines recorded heavy loss last year. The global shipping industry suffered heavy due to the economic downturn and all other sectors related to the shipping industry. The total output and trade volumes declined drastically. However, there are indications that the industry would recover this year with the slowing down of the economic recession.

The country should be mindful of the threats emerging from Indian ports and needs to be geared to face the challenges. It is important to complete the Port projects - Hambantota and Colombo South Harbour on time for future attractions.

Harbour expansion projects and infrastructure to bring bulk vessels should be completed within the set time frames to derive benefits from the shipping industry.

The shipping industry in Asia will flourish in the next few years and Sri Lanka will definitely benefit. The expansion of infrastructure facilities such as harbour facilities in Sri Lanka will bring in bulk vessels to the country. This will result in employment opportunities.

The unstable market, trade and charges imposed by carriers have been challenged with shippers. For shipping lines the imbalance of trade has become a challenge.

In addressing these issues, the industry should look into fast and fine technology that will provide end-to-end solutions. The shipping industry in Asia is facing the lack of a proper regulatory framework that affects manufacturers and exporters.

The shipping industry contributes to 10 percent of the GDP. Sri Lanka needs to expand capacity in service levels and to introduce new technology for further contribution.

The shipping industry in Sri Lanka has been growing even during the crucial terrorism period as the shipping industry in Singapore too recorded a growth of 10 percent of its GDP. A proper framework should be in place for further development of the shipping industry.

Sri Lanka is fortunate to have the Asian Shipper’s Council headquarters here. The headquarters of Asian Shipper’s Council Training Academy will also be set up in Sri Lanka soon. It will cater to the Asian region in developing capacities in the shipping industry.

The labour conditions in the industry has to be developed more efficiently. Apart from that the legal, regulatory and policy matters too should be addressed.

Shipping or cargo by sea has played a significant role in the development of the human society over the centuries. Presently there are two major types of shipping services: shipload services, which move goods in bulk for one or more shippers; and liner services, which carry relatively small shipments of general cargo on a regular schedule for many shippers. The shipping trade continues to expand, bringing benefits for consumers across the world through competitive freight costs. Thanks to the growing efficiency of shipping as a mode of transport and increased economy, the prospects for the shipping industry’s further growth continue to be strong.

Shipping is the safest and the most environmentally form of commercial transport. Shipping is amongst the very first industries to adopt widely implemented international safety standards. Because of its inherently international nature, the safety of shipping is regulated by various United Nations Agencies—in particular the International Maritime Organization (IMO), which has developed a comprehensive framework of global maritime safety regulations. IMO is a United Nations Specialized Agency with its 169 workforce, adopts global regulations on safety, security, and the prevention and control of maritime pollution from ships around the world.

The year 2010 was named as the “Year of the Sea Farer” to focus attention on the importance of shipping safety, maritime security and the maritime environment in order to emphasize a particular aspect of IMO’s work. The “Year of the Sea Farer 2010” was organized to provide the maritime community with an opportunity to pay tribute to sea farer’s for their excellent contribution to the entire world in enhancing the global trade.

The “Go to Sea” campaign was established in November 2008 by the (IMO) in association with the International Labour Organization, International Chamber of Shipping, International Shipping Federation, International Association of Independent Tank Owners, International Association of Dry Cargo Ship-owners and International Transport Workers Federation to protect the rights of the seafarers and to ensure their safety, when involved in accidents.

The “Go to Sea” campaign was also launched to inspire a new generation of seafarers by media activities relating to seafarer’s, making an awareness program for seafarer training, highlight the importance of a seafarer’s role, and to honour them.

There are many different types of companies involved in the shipping industry such as ship owners, managers and agents, container services and terminals, freight forwarders, and even manufacturers and exporters who have their own shipping departments and require specially trained shipping personnel. Although some positions require a degree in a certain field, the shipping industry does not generally specify particular disciplines as entry requirements. Many shipping companies provide in-house and on-the-job training including management courses and executive development programs. Others may also grant education allowances for local or overseas courses of study that will help in career development. Some companies may offer shipboard training to provide staff with exposure to seagoing operations.

In the early 1970s, with the affiliation of the Ceylon Shipping Corporation (CSC), a cadet training programme was initiated on the vessel MV “Lanka Kalyani” where batches of twelve cadets were trained aboard yearly. Sri Lankan youth were given opportunities to obtain cadet training with foreign shipping companies, and later proceed to the UK, India, Australia, or to other Commonwealth countries for their Certificate of Competency Examinations. It was in the mid 80s that the government-based NDT Cadet Training Schemes was initiated, and followed the establishment of Nautical Colleges in the private sector. For the first time Certificate of Competency Examinations for junior officers were held in the early 90s, followed by the first Master Mariners Examination, which was held in the year 2002. These initiatives were reaching benefits in developing the local shipping sector during the past five years. Maritime Colleges in Sri Lanka today prepare students for careers through a content- centered curriculum and a hands-on team building approach to learning. The structured communities emphasize responsible citizenship and self- discipline, while maximizing opportunities for exercising leadership. The Colombo International Nautical & Engineering College (CINEC), the Mercantile Seamen Training Institute (MSTI), and the Lanka Academy of Technological Studies are considered as the pioneer institutions where thousands of students complete their training successfully as rated and licensed seamen. Training programmes conducted by these institutions assist students with training and training equipment in the field of maritime transport.

The utmost measures are being taken to enhance the capabilities of maritime transport training with the multinational scope in developing countries. These programmes do aim at improving the conditions of work and life of ship officers, and increasing the ratings in seagoing vessels. The Colombo International Nautical Engineering College (CINEC) in Malabe, established in the year 1990, caters for students to reach their goals in higher education in the field of Marine Engineering, and Management.

The maritime experience begins in the classroom with top- ranked academic programmes. The Mercantile Seamen Training Institute (MSTI), which is located in a sea front in the city of Galle, creates a vibrant and active learning community and the best maritime learning opportunities and experiences for all students.

The area of student programmes provides support for those students through services and activities. Academic as well as social support is provided by the programmes.

Whether you need tutoring, mentoring, or just academic guidance, staff is always available to assist you. Success is the number one goal for each and every student, providing tools and support needed is vital for today’s student.

The life in the school is more than lectures, tests, books and studying. It also encompasses meeting diverse people, experiencing new and exciting things, developing students’ personal skills and enhancing interests. Getting involved with every activity will benefit students in and out of the classroom and will give them memories and experiences that will last a lifetime. With the completion of the development activities in the Colombo Port, it will be one of the few ports to serve large ships, which are at present used frequently in the global shipping industry.

The current growth level in the regional shipping industry, which records a continuous growth, has created viable business for industrialists. Therefore, it is important to address the regulatory reforms that are necessary to further fuel the growth.

The anti-competitive practices will adversely affect the shipping community and the rates should not be increased in an ad hoc manner. The pricing should be similar to that of developed countries and need to have rationality in the pricing mechanism.

In keeping with the budget proposals certain Acts are amended to facilitate the process to enable Sri Lanka to become a trading hub. The respective committees are working on these issues at present.

The construction of the five kilometres Colombo South Port breakwater project is scheduled to be completed by the end of this year. The industrialists expect the Sri Lanka Port Authority (SLPA) to complete the terminal building with an investor partner. The terminal will be operative by early 2013.

The Mahinda Rajapaksa (Magampura) Port will take a few years to reach the operational level. The SLPA needs to position it as a friendly and competitive port to attract businesses. It needs to differentiate and be innovative to become competitive. There should be an immediate financial and marketing plan and an awareness building process to ensure sufficient business is attracted to the port.

The regional ports are competing and the competition is healthy to improve the level of efficiency. The country needs to do its job right to bring in business for the country. Sri Lanka could capitalize on its position on global shipping industry where the country is ranked around 30th among the container ports. It is considered as a main transshipment hub. The shipping industry is faced with uncertainty as the global oil prices and the market being imbalanced. The industry sees a lot of major fluctuations in the freight charges. However, the global economic recovery will have a positive impact on the shipping industry where Sri Lanka could benefit from it in the near future.