Transshipment decline at Port of Colombo extends to second straight month in February

The transshipment volumes at the Port of Colombo declined for the second straight month in February, as the services that earlier pulled out of Colombo, amidst heavy congestion, were yet to return to the port.

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This marks a stark contrast to the robust growth the port experienced during the first and latter parts of 2024, when it benefited from the diversions caused by the disruptions in the Red Sea. The transshipment volumes dropped by 9.2 percent year-on-year (YoY) to 479,942 twenty-foot equivalent units (TEUs). This decline is particularly concerning, given the port’s strong performance in 2024, when it capitalised on the increased traffic from the Red Sea crisis.

However, mainline shipping lines earlier this year pulled some of their services out of Colombo, amidst heavy congestion.

Congestion at the Port of Colombo heightened late last year, as Sri Lanka Customs dramatically increased inspections in a last-minute push to meet the government’s revenue targets. The port’s operational conditions have returned to normal, mainly due to the withdrawal of shipping line services, which were yet to announce their return to Colombo. The contribution of transshipment to the overall container throughput also declined to 79 percent in February, from 82 percent a year ago.

Digitalisation is mooted as the solution to address the operational inefficiencies of the port. The Port of Colombo has been actively seeking to implement a port community system (PCS) to enhance efficiency and reduce corruption. Shipping agents have even given their consent to pay a reasonable fee for this service.