Sri Lanka’s Joint Chambers and associations propose solutions for port congestion crisis

In light of the ongoing challenges faced at the Colombo Port, Sri Lanka’s Joint Chambers, along with key trade, maritime and logistics associations, have proposed several short-term and medium-term solutions to mitigate the impact of port congestion on the nation’s economy.

Issuing a joint statement on Thursday (30), they emphasized that exporters are facing potential delays with imported inputs, missed shipping opportunities, and increased processing costs, undermining their competitiveness in the global markets and foreign buyer confidence in Sri Lanka.

“Reports indicate that ships are bypassing Colombo for more efficient neighbouring ports which would be a permanent shift, resulting in lost container volumes for the Colombo port and rising freight rates, along with additional costs for freight forwarders and shipping lines.”

Importers, transporters and all other stakeholders are also losing business opportunities due to these delays, contributing to higher prices for essential goods and an increased cost of living for the people of Sri Lanka, the statement warned.

It further said that the manufacturing sector is struggling with material delays and finally this overall situation threatens Colombo’s status as a transshipment hub and poses serious risks to the overall economy.

Accordingly, the Joint Chambers and associations recommend the Government urgently take up the following recommendations to meet the pressing concerns affecting port operations, trade efficiency, and economic growth:

Short-term (within the next two weeks):

1. Swiftly implement Scanning and Screening Systems to address the backlog: Empower 24/7 operations for screening units to streamline container processing. Incorporate other border agencies like SLSI, Food Inspection, Plant Quarantine, Animal Quarantine etc. into this unit to fast track the approval process. Resulting containers to be released based on scanning reports, eliminating the need for additional physical examinations unless there is a serious observation. Ensuring work by officers occurs continuously during working hours including other government officers required for clearing. There could be shifts to cover the 24 hour requirement in the near-term to cover the backlog.

2. Leverage existing data on importers to expand the Green Channel: The risk management unit has extensive data on the companies which are registered with them for imports. Utilize this data to identify low risk cargo and expand the exemption facility along with the green channel facility to overcome the crisis.

3. Fast-track approvals for Authorized Economic Operators (AEO) and Customs Economic Operators (CEO)- allowing low-risk cargo to bypass excessive inspections.

4. Expand the Risk Management Processes: immediately correct the duplicating HS codes in the system which are subject to additional border agencies’ approvals. For example if SLSI approval is to be obtained in advance and if it is approved by SLSI, the Customs’ Asycuda system requires that particular HS code for RCT examination. Customs screening unit can based on the SLSI prior approval, releasing containers instead of directing them to RCT for Customs examination

5. Reconvene the Speedy Clearance Committee- In the past, there was a committee comprising public and private officials to fast-track clearance. Such a Public-Private committee can be established with representation from Chambers and related associations to streamline the approval process.

6. Expand the Customs “Out Panel Examination Facility” for a period or increase staff from Customs long room after office hours at RCT to increase the number of containers to be examined and released on the same day for a period. This action will immediately resolve the congestion until the medium-term solutions are met.

Medium-term (within the next 3-6 months):

1. Expand Container Yard Capacity: Identify and utilize underutilized container yards near to the Colombo Port to ease space constraints.

2. Digitize Operations: Prioritize end-to-end digitalization of Customs processes, risk management systems, and approvals to reduce delays and enhance transparency.

3. Strengthen Manpower: Rehire experienced retired customs officials to address manpower shortages and improve operational efficiency.

4. Enhance Accountability: Introduce a structured framework for monitoring implementation and holding relevant parties accountable for operational lapses.

5. On-board a further 50 companies on the AEO/CEO program: This will support in facilitating faster clearance.

The above recommendations are proposed by the following Chambers and Associations:

1. The Ceylon Chamber of Commerce (CCC)

2. American Chamber of Commerce in Sri Lanka (AMCHAM)

3. Association of Clearing & Forwarding Agents (ACFA)

4. Association of Container Transporters’ (ACT)

5. Association of Inland Container Depot Operators (ACDO)

6. Association of NVOCC Agents (SLANA)

7. Ceylon Association of Shipping Agents (CASA)

8. Ceylon Freight and Logistics Association (CEYFFA)

9. Ceylon National Chamber of Industries (CNCI)

10. CHA Traders Association