NVOCCs show less interest in Colombo claims SLANA

From left SLANA Saliya Senanayake, NVOCC Treasurer Mohamed Thahir, NVOCC Chairman Capt. A. V. Rajendra, NVOCC Vice Chairman Prasad Jinadasa and NVOCC Secretary Minnaz Riyal - Pic by Daminda Harsha Perera

By Charumini de Silva

Sri Lanka Association of NVOCC Agents (SLANA) last week warned that non vessel operating container carriers (NVOCCs) operating in the Indian region have now begun to show less interest in the Sri Lankan market and are turning their focus to other destinations due to over regulatory factors.

“Negative signals with regards to over regulating factors in Sri Lanka against international commercial practice could favour the terminal developers in India and Pakistan,” SLANA Chairman Capt. A.V. Rajendra said announcing the formation of the association on Thursday (1) in Colombo.

He explained that SLANA was formed in May, primarily to protect the interests of the NVOCC agents in Sri Lanka, ensure that they gain recognition and also to meaningfully contribute to the development of the shipping industry and the economy of the country.

“There is no association to protect our interests at the moment because some state bodies or authorities do not know whether we belong to the freight forwarders or to the shipping agency section,” Rajendra stressed.

Noting that the existence of NVOCCs was important for the local import and export trade as the figures have proved their contribution towards this, SLANA is on the firm view that the regulators will give an attentive ear to the issues prevailing in the industry.

He said NVOCCs accounts to over 12% of the total throughput of Colombo port and more importantly, they contribute around 30% of the regional throughput of Colombo port. Currently, 60 to 70 NVOCC agents are engaged in the import, export and transshipment of containers to and via Colombo.

“We are for regulators, because they discipline the industry, stakeholders — but when you introduce regulations it also needs to help the economy,” he pointed out.

With Sri Lanka in the offing to strengthen its Free Trade Agreements (FTAs) with India, Pakistan and China one would expect the regional NVOCCs to participate in the trade aggressively. However, SLANA questioned the validity of these FTAs towards carriage of goods to Sri Lanka as NVOCCs are finding Colombo an over regulated destination to do business.

Rajendra said this is in view of NVOCCs inability to recover their land based costs (most importantly discharging cost in Colombo) unlike in the past, due to introduction of a regulation preventing the NVOCCs and shipping lines to recover their costs via a terminal handling cost (THC) two years ago.

The NVOCCs are dominant in the region extending from West Asia to the Indian Sub Continent and South East Asia and their contribution to the Sri Lankan economy has been hitherto gone unnoticed.

“The value and the importance of the NVOCCs came to light to Sri Lankan trade, only when the shipping lines suspended their services to Iran and other destinations when Iran was slapped with economic sanctions. The NVOCCs were the only operators who came to the rescue of the exporters and importers serving the industry well,” he added.

SLANA Vice Chairman Prasad Jinadasa and Senior Exco Member Saliya Senanyake also pointed out that the THC for exports was never an issue for the NVOCCs in line with the market forces and they were able to absorb the cost in the past.

However, the THC on imports was an important recovery for the NVOCCS in line with the market forces and maintains sustainability of the operators.

It was pointed out that SLANA would soon meet the authorities and other officials to enlighten on the adverse effects of over regulating the industry and moving away from the global commercial practices.

Noting that NVOCCs are licensed under the category of freight forwarding, the association is also seeking for a separate category for Licensing with the Director General of Merchant Shipping, which would cater to the requirements of the NVOCCs such as facilitate SLANA to liaise or to have direct dialogue with the Sri Lanka Customs, Sri Lanka Ports Authority, Terminals for direct flow of information on operational matters, detention, seizure of goods and so forth.

“We already met the Director General of Merchant Shipping of the Ministry of Ports and Shipping, the management of Sri Lanka Ports Authority. We will soon meet the Minister of Ports and Shipping as well as the Director General of Sri Lanka Customs,” Rajendra added.

The office bearers of the Association are; Chairman Capt. A.V. Rajendra, Vice Chairman Prasad Jinadasa, Secretary Minnaz Riyal, Treasurer Mohamed Thahir and Senior Exco Member Saliya Senanayake.

Almost 50% of the NVOCC agents in Colombo have joined SLANA and the association is confident that other agents will also join soon.