Logistics and freight forwarders urge swift action from all stakeholders to resolve issues

Committee (seated from left): Diruni Chanmugam (Sherman Logistics), Vice Chairman Channa Gunawardena (Expelogix), Chairman Dinesh Sri Chandrasekara (HTL Logistics), Treasurer Andre Fernando (MAC Holdings), M.F. Ibrahim (Famous Pacific Shipping Lanka). 

(Standing from left): Kolitha Wickramasinghe (Salota International), Tyronne Soza (Mack International Freight), Navin Perera (Gac Logistics), Suminda Hettiarachchi (DHL Global Forwarding Lanka), Sujan Malawana (Speedmark Transportation Lanka), Nishan Jayawardena (Aitken Spence Cargo), Priyan Seilman (Scanwell Logistics Colombo), Sampath Hemaratne (Freight Links International)

• New SLFFA Chief Dinesh Sri Chandrasekara renews call to make single window platform a reality; says lack of it is industry’s biggest roadblock
  
   
• Regrets no meaningful measures taken on Sri Lanka’s logistics hub aspirations; warns delay will force SL lose out; moots a ‘think-tank’ to formulate a roadmap to realise the vision  
  
   
• Stresses need to fast track SLFFA Cargo Services venture into setting up an off-port facility—to enable MCC operations, import LCL and transhipment facilitation; calls for speedy approvals and support from the Sri Lanka Customs and the Ports Authority 
  
   
• Calls for early conclusion of E air-way bill project
  
   
• SLFFA evaluating a bonded transport facility, between Mattala Airport and the BIA as well as the Port of Colombo 

Celebrating its Ruby Anniversary, the Sri Lanka Logistics and Freight Forwarders Association (SLFFA) held its 40th Annual General Meeting on 24 September. 

In addition to marking four decades of service in the logistics industry, the AGM will also go down in SLFFA history for being the first to be held on a virtual audio-visual platform with the participation of over 130 members and invitees in addition to the Ex-Co.

The AGM also created a lot of buzz and excitement within the logistics fraternity as an election was held for a position in the Executive Committee using an electronic voting platform, again marking another significant milestone in SLFFA history and the logistics industry. 

Dinesh Sri Chandrasekara was appointed as the Chairman for 2021/2022 succeeding Roshan Silva. Channa Gunawardena and Andre Fernando were appointed as Vice Chairman and Treasurer respectively.

In his speech, as the 20th Chairman of SLFFA, Dinesh Sri Chandrasekara said the industry was at a critical juncture given the volatile times. “The first quarter of the last financial year was the worst-hit, with business at its lowest. Come second and third quarters, business volumes improved; yet, imbalances within the shipping industry continued, leading to significant mismatches in demand and supply of capacity, and record-high freight costs,” he said. “Working capital constraints are weighing down on our industry and the present foreign exchange crisis is further impeding business prospects,” he added. 

SLFFA new Chief said the liquidity crunches across all industries spill over to freight forwarders and though this problem has been in existence for a while, at present it looms darker than ever before. In order to mitigate the risks to which freight forwarders are exposed and to provide clear information on the creditworthiness of customers, SLFFA is currently working with a software developer to modernise the debtor database. Once completed and launched, which would hopefully take place within the next two to three months, this system will allow SLFFA members to manage their credit exposures effectively. SLFAA is planning to collaborate with the CRIB in this regard and the first round of talks was held a few months ago. 

The new Chairman also said that amidst evolving challenges in this decade, continuous knowledge sharing, education, training and capacity building, are of utmost importance to any industry. “The success of our industry is strongly linked with the quality of our own teams. AITT, our education arm, has a pivotal role to play in this regard. We should also focus on attracting companies outside the SLFFA membership as well as foreign students from neighbouring countries like Maldives and Bangladesh. Discussions are currently underway with the relevant authorities to obtain the required approval to carry out these programs for international students,” he said. 

The need to focus on Sri Lanka’s hub aspirations was also stressed by Sri Chandrasekara at the SLFFA AGM. “So far, no meaningful measures have been taken despite the enthusiasm. We have what it takes to make Sri Lanka a world-class hub next to Singapore and Dubai. SLFFA, along with other stakeholders can make this a reality; we should work together with our experts, industry specialists, academics and successful entrepreneurs, to create a ‘think-tank’ and formulate a roadmap to reach the hub status,” he emphasised.

He called upon the Government along with all relevant stakeholders to come on board. “If we stay complacent and continue to dilly-dally, we will most likely lose out to our neighbours, irrespective of our strategic location. The urgency is very real, given the upcoming South Indian ports. It is actually now or never,” the SLFFA Chairman warned. 

It was pointed out that as per the World Bank Logistics Performance Index, Sri Lanka is ranked 94th out of 160 countries. This is despite the Port of Colombo ranking 23rd amongst the busiest ports and 15th amongst the best-connected ports in the World. Countries which are poorly connected and even landlocked have better rankings. “Our logistics industry is well-ahead of our regional competitors, with many of our companies doing exceptionally well. Such a low ranking is actually baffling; you will agree that we surely deserve better. As an association, it is imperative that we rally all stakeholders and lobby—try to influence focus groups—the opinion makers, who give their feedback to the worldwide logistics survey. We have to take our fair place on the Index. It’s simply a matter of changing their perception,” SLFFA Chairman said. 

The need to pursue the single window platform, to connect all agencies online and in real-time was also stressed. “We have gone down this path before, on many occasions, since 1996. Yet, such a platform has never materialised. In fact, this is our industry’s biggest roadblock, bringing down our level of efficiency and burdening our transactional costs. With COVID-19 rampant, this is an ideal time to take this up with the relevant authorities, trusting that they will heed our call. This is not just for our industry, but also for the sake of our economy. The timing is just right,” SLFFA Chairman stressed. 

He requested the Government to draw up clear policies to give life to this much-needed platform. 

SLFFA is also banking on the forthcoming project, ‘Digitising global maritime trade’ under the auspices of UNCTAD and the German alliance for trade facilitation (GIZ). Sri Lanka and Cambodia have been selected for the pilot projects, with discussions already underway with key stakeholders. SLFFA is keen to play its part to push this initiative forward. 

At the AGM the phenomenal success of the commercial arm, SLFFA Cargo Services was highlighted. The Chairman said the import terminal at the BIA has been operating for over 25 years, extending an exceptional service to members and importers alike. The standards maintained have benefited the industry, even influencing its competitors. He called all SLFFA members to channel all their freight to SLFFA Cargo Services. 

On the ocean freight front, the new Chairman said it was time that SLFFA Cargo Services ventured into setting up an off-port facility—to enable MCC operations, import LCL and transhipment facilitation. 

It is about time that the authorities also give us a green light for this operation. The Company has been mooting this idea for the past 15 years or so, yet red-tape has always stood in the way. “The industry is enthusiastic and fervently hopes to see the current initiative take-off, with speedy approvals and support from the Sri Lanka Customs and the Ports Authority,” the Chairman added. 

Focusing on the e-freight, specifically on the E airway bill project, he said SLFFA has also been collaborating with CCN for over a decade. The cost has been significant, almost over Rs. 20 million rupees. Finally, this is gaining traction with the Civil Aviation Authority setting a deadline. “The ground reality is that some airlines are still reluctant to comply with this directive. On one hand, everyone is more than willing to sing praise of digitalisation and paperless transactions, but when the opportunity is presented to them, some are not willing to move forward and more so, short-sightedness. We cannot sit on the fence, watch and wait for the airlines to act. We must lobby with SriLankan Airlines, as the ground handling agent, to strictly enforce this directive,” Sri Chandrasekara said.

He also revealed that SLFFA Cargo Services is currently evaluating a bonded transport facility, between Mattala Airport and the BIA as well as the Port of Colombo. “This is timely, after all, Mattala Airport is being developed to be a hub for cargo. The first mover advantage will be our ace and we trust that the authorities will support us in this endeavour,” he added.

In conclusion, the SLFFA Chairman said: “Our industry’s future lies in our hands. We must not forget that our industry growth was modest, if not flat, when comparing statistics from 2017 to 2019, with 2020 being even lower than that. Historically freight forwarders have found much of their revenue through imports and exports. However, the time is now ripe for us to look at alternatives. Using the domain knowledge that we possess and the specialist skills that we have, we should be able to offer more creative solutions to our customers through innovation, technology, value added services and B to C offerings, to name a few. Out of the box thinking has to be the way forward rather than cutting on price and leveraging on credit in a limited market place.”