Major shipping line pulls out of Colombo Port
The Colombo Port’s largest vessel operator MSC has announced a temporary pull out from Colombo bypassing the congestion and thereby aggravating the crisis at the region’s key shipping hub.
MSC is the largest client of the Colombo Port handling 30 per cent of total volumes and amounting to 60 per cent of the Jaya Container Terminal (JCT) volumes. It is the world’s second-largest shipping line in terms of container vessel capacity.
Sri Lanka Ports Authority (SLPA) sources stated that this temporary pull out of the Colombo Port has resulted in about 40 ships bypassing Colombo. Business Times is in possession of the contents of the letter sent to the SLPA by MSC on Thursday.
The MSC letter stated that they are disappointed and will shift their transshipment operations to Singapore and Mundra, Cochin and Ennore ports in India.
It said the MSC has been “heavily affected due to current Port of Colombo congestion” and diverted over 20 ships and discharged boxes in various Indian ports and Singapore and now Colombo imports and some boxes must be re-routed back to Colombo incurring additional costs.
MSC has been holding ships at JCT berths for over 4 to 5 days and even at present the US service at the JCT has been around for over 4 days and has not yet been completed and productivity is lesser than 15 mph (movements per hour), it is learnt.
In the letter MSC has accepted the challenges faced by the SLPA under the current crisis with a number of COVID -19 detections and labour union demands but has highlighted how the Colombo International Container Terminal (CICT) and South Asia Gateway Terminal (SAGT) are operating under the same conditions.
The letter states that since the current crisis has been prolonging for over a month now and with no immediate solution announced by the SLPA in this regard the MSC has been compelled to temporarily move out of Colombo and divert volumes to Mundra, Cochin and Ennore.
MSC wanted to clear its transshipment volume “long idling” inside the JCT yard without moving out as there is huge pressure building up from customers to move these boxes, the letter said.
MSC has stated that they cannot guarantee immediate return of its traffic to the Colombo as they have been “seriously affected” since they “fully depended with Colombo in this region with over 23 owned ships per week calling Colombo,” the letter notes.
The vessel operator also notes, “When other lines shifted to two private terminals, MSC kept all mother vessels lesser than 14.5 m draft at JCT. MSC shifted to CICT only deep draft mega ships.”
The letter also notes that “MSC Geneva never expected this situation in Colombo as they know Colombo would find some solution to run the terminal but this time unfortunately failed.”
MSC has expressed concern over SLPA not issuing any announcement when the current situation has been continuing for the last 35 days.
SLPA sources indicated that this would mean the “beginning of the end for the SLPA” and MSC will get used to Mundra and Cochin and once the Adani group moves in to run operations at the ECT these MSC vessels would shift to the ECT resulting in a loss for the SLPA.