Maersk Line Managing Director- South Asia Steve M. Felder urged to fully liberalize the ownership on the shipping and freight forwarding agencies in Sri Lanka to bring in additional investments and benefits to the country and to achieve its strategic locational advantage.
Expressing satisfaction over Sri Lankan government’s budget proposal for the removal of ban on foreign ownership of shipping and freight forwarding firms, Felder emphasised the importance of implementing this proposal without any delay to enable major international shipping lines and logistics operators to base their operations in Sri Lanka.
He made these comments speaking at a press briefing, held in Colombo yesterday. Ownership of local shipping and freight forwarding industry is structured against free market policy. Sri Lanka is one of the few countries that stand out as having not liberalized the sector as of yet, Felder noted.
“We always believe in free market activities. When Finance Minister Mangala Samaraweera announced in his budget speech that the government intends to liberalize the ownership structure within the shipping and freight forwarding industry, we expressed our support in this regard.
“We would like to see that process go to conclusion stage. It will also send a strong signal to the world that Sri Lanka is open for business and also ensure healthy competition. We certainly see this as a win-win situation and we don’t see any losers in this process.Felder also noted that if the liberalization does take place as planned, Maersk will consult its partners with regard to future growth plans in Sri Lanka.
“But it’s a bit premature to say what we will do in Sri Lanka.”
He also highlighted the need to continually develop deep draft capacity of the Colombo port, noting that it will provide more headroom for growth.
Speaking on growth in trade in Sri Lankan market, Felder noted that growth has been fairly moderate in terms of cargo handling and on the exports side, the company has recorded a 5% growth year on year.
On imports side, the company saw around 2% growth during the first quarter of this year versus first quarter of last year. According to Felder, imports have grown at a slower rate due to rupee depreciation.
Felder also commented on recent policy changes in India on cabotage law, noting that India has relaxed the cabotage rules to allow transshipping export-import cargo at Indian ports. This will help India develop its coastal shipments and attract more containerised cargo on its ports.
By relaxing these rules, India is planning to build a successful transshipment hub by attracting more containerised cargo by reducing time and cost for mainline vessels that now transship containers at neighbouring hub ports.
Picture caption: Maersk Line Managing Director- South Asia, Steve M.Felder speaking at the event.
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