Sri Lanka has a long history in shipping and has been the centre of trade in the Indian Ocean.
"It is a very well-known fact in the trade that few shipping agency houses are benefitting by having many shipping agencies with them", an exporter said.
In order to prevent cartelization, anti-competitive behaviour and monopoly happening within the trade it would be wise for the government to look into the matter urgently.
The monopoly behaviour of such a shipping agency houses would be dangerous to the Government of Sri Lanka as it can control the freight rates and pressurise the Sri Lanka Port Authority to reduce tariff rates in order to benefit their interest.
They would also be in a position to dictate freight rates to the exporters of Sri Lanka and prevent competitive behavior.
Cartelisation and anti-competitive behaviour is already seen in the industry Cartelisation are disadvantages to the Sri Lankan exporter as they do not enjoy the best possible and competitive freight rates in the industry for their exports and exporters would agree that the need for competition is vital.
It also would be the fact that for example if these shipping agency houses have a certain stake in any private bank, there won’t be anyone stopping them from dictating to the exporter to open up Letter of Credits from that bank therefore bringing in foreign exchange to that bank only and not having an even spread in the banking sector for foreign currency distribution.
The Sri Lankan exporter should be safe guarded by this practice which is currently happening in the trade.
The need for an anti-competitive Council or regulatory authority to monitor monopoly behaviour in Shipping is a must in order to see this industry to not fall into the hands of individuals or companies with hidden agendas.
Competitive behaviour and fair practice of shipping activities in the industry will benefit the Sri Lankan exporter to obtain competitive and fair freight rates for them and create competition among all shipping lines in order to secure cargo for their individual shipping company.
As Sri Lanka’s economy is centralised on exports competition is vital to see that the industry improves without competition and fair practice by certain individuals and companies will have devastating effect on Sri Lanka and its economy.
It would be wise for the Government of Sri Lanka and the Ministry of Shipping together with Director Merchant Shipping and Sri Lanka Port Authority to take up this matter and fully regulate the monopoly and cartelization behaviour of these few shipping agency houses, by having a balance of the trade.
Regulation could be brought into limit one main-line (Container/Car Carrier), Regional Line and one feeder operator with anyone individual or company and preventing anti-competitive and monopoly behaviour.
This also promotes a balance in the shipping trade which will prevent one individual or company trying to use their position as a monopoly to influence the trade.
It is also the question that if FMC (Federal Maritime Commission) of USA, anti-competitive authority in the European Union, Monopoly and Competition councils and authorities around the world are monitoring this situation elsewhere in this trade, why is this fact not taken up in Sri Lanka?
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