Why Sri Lanka must realign its terminal handling charge policy to secure maritime future

In the bustling world of global logistics, where billions of dollars in goods traverse oceans daily, Colombo has long stood as a vital intersection—a strategic transshipment hub connecting East and West.

- BY Nishel Fernando

Yet, for a decade, a contentious domestic policy has cast a long shadow over its port operations, creating friction with international partners and, according to industry experts, undermining the nation’s competitive edge.

The policy in question governs Terminal Handling Charges (THC), and a growing chorus of maritime stakeholders is now calling for an urgent return to global best practices to ensure Sri Lanka can navigate the increasingly competitive waters of the 21st-century shipping industry.

This debate, which has recently resurfaced in public discourse, centers on a 2014 government gazette that fundamentally altered a decades-old system, sparking controversy that has simmered ever since. As neighbouring nations invest heavily in new deep-water terminals, challenging Colombo’s long-held dominance, the need to scrutinize and reform this policy has become more critical than ever. A deep dive into the issue, based on insights from maritime industry experts, reveals a policy at odds with international norms, one that has created a cascade of negative consequences ranging from a loss of transparency and a drain on foreign reserves to direct conflicts with the legal bedrock of international trade.

Understanding the Core Component: What exactly is THC?

Before delving into the complexities of the 2014 regulation, it’s essential to understand what Terminal Handling Charges represent. THC is not part of the ocean freight—the cost of moving a container from one port to another. Instead, THC refers to the collection of local, shore-based costs associated with the handling of a container at the Port of Loading (POL) and the Port of Discharge (POD).