Scale Returns
Since last reporting, your columnist has been to Colombo, to take part in a Conference organized by Ceylon Association of Ship Agents (CASA) and to hear the news of this island which always seems to perching on the brink of something much better. The shipping industry in Sri Lanka is much concerned with the upturn of trouble in the north and the decision of war risk underwriters to consider the island as a whole an area of special concern. It is not only poets who are the unacknowledged legislators of the world-war risk underwriters have the ability to deem areas unsafe in the face of many local interests and political correctness. Indeed, after Yemen became an area subject to additional premium, it more or less eclipsed the ambitions of the new port ventures there.
What can be done by governments who wish the war risk underwriters would think otherwise? Not very much aside from ushering in civil peace and law and order.
The port industry in Sri Lanka is facing big changes. There are plans afoot to adapt Colombo to the bigger scale of container shipping – the turning circle is not very attractive at present. But even with such plans, the government run port does not carry any liability insurance – which puts it into quite a minority in today’s world. The other operator in the port – the South Gateway – has new owners in Dubai.
Generally, the sentiment amongst the maritime community is that Sri Lanka’s geographic position gives the country a natural advantage as a regional hub port.
The scale of modern global container shipping is far too huge to attract a South Asian shipowner-player, but a feeder port of the future on a much larger scale than today is certainly thinkable.
The scale is the important thing.
As the really large container ships join the operating fleets of the world in the coming years, the present generation of not exactly small ships get new roles as “mere” regional players/feeders. The cascade down effect at work. But the largest single sector of container shipping nowadays is the “intra-Asian” trade, a trade where 5000 TEU feeders will become part of tomorrow’s reality. Smaller container ships are in effect a diminishing market and ports used to welcoming them must think again to survive and thrive.
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