Factors influencing the development of Port of Colombo as a Mega Hub Port for Transshipment Containers and current challenges

Abstract

The Port of Colombo has earned the status as a hub port for transshipment containers in the region as it strategically positioned to serve the trade in the Indian Ocean. Procreated out of location advantage, Port of Colombo has carved out a niche linking feeder connections in the Indian sub-continent trade to main sea routes on the back of its access to the Indian Ocean, as it aspires to become one of the key transshipment hub ports in the globe. During the past couple of decades’ major ports around the world have faced significant challenges due to rapid evolvement in marine technology and international logistical system. Primarily there were two major thrusts have been impacting the seaports which identified as ‘Increased specialization of ship design’ and the ‘Growth in ship size’. Above two factors of ship specialization and capacity enhancement that were continued to progress has resulted a greater demand in Ports and container terminals to invest on improvements to equipment and ports infrastructure. The continued growth of global containerization has led to the deployment of larger cellular container vessels. Therefore, each subsequent generation of containership which evolved has challenged and limited the number of ports of calls. At the same time, Main Line Operators (MLO’s) were incited to engage the largest containerships possible on their shipping routes in order cater to the increased volumes of cargo. As a result, container ports and terminals were compelled to provide substantial capital investment to acclimatize and meet the new demands in ports infrastructure, cargo-handling technology, and the inland logistical system. On the other hand, from MLO’s perspective this larger containership deployment requires an efficient feeder connectivity and substantial amount of cargo for their service offerings to be commercially feasible. This aspect too imposed pressure once again on Ports and container terminals to planning and performs a high productivity in container handling and improved vessel turnaround time to ensure efficient and effective feeder networking and timely connectivity.

The third related thrust which impacted the container hub ports around the world is the compulsion of the development of integrated logistics systems and infrastructure facilities in the country. This development reflected due to the demand in expanding the network of improved inter-modal links to facilitate ‘hub and spoke’ concept. In the shipping world, integrated logistics led to establishment of several major alliances and mergers of shipping lines.