Outgoing SLFFA Chairperson outlines challenges and calls for consistency

• Asserts continuity of key policies minus politics and politicised decision-making is need of the hour

Following is the address delivered by Tania Polonnowita Wettimuny, the outgoing Chairperson of the Sri Lanka Logistics and Freight Forwarders’ Association, at its 36th Annual General Meeting on 6 July at Hilton Colombo Residences

SLFFA Secretary General Rohan Induruwa, SLFFA Vice Chairman Roshan Silva, SLFFA Immediate Past Chairperson Tania Polonnowita Wettimuny, SLPA Chairman Dr. Parakrama Dissanayake and SLFFA Chairman Jagath Pathirane at the head table

Guest of Honour this evening Dr. Parakrama Dissanayake, Chairman of the Sri Lanka Port Authority, Ms. Roshani, Assistant Director Merchant Shipping, Mr. Ranjith De Silva, VC AASL, Mr. Chamara Ranasinghe, Head of Cargo SriLankan Airlines, Mrs. Indira Malwatte, Chairperson EDB, special invitees, past chairmen, members of the head table and colleagues. 

The year that has gone by could be viewed as one of the most challenging years with the main markets such as the UK making a drastic move to exit the EU, creating turmoil within the European Union, with further uncertainties in the latter part of the year with US politics taking an unexpected turn causing further doubt over the stability of one of the largest economies in the world. 

We have witnessed the collapse of a major shipping line, causing great inconvenience and cost to shippers, importers and logistics companies to retrieve containers caught up in the bankruptcy mess. Most liners are still trying to consolidate after the prolonged depression of rates. Unexpected challenges such as the recent cyber attack on A.P. Moller-Maersk has increased the vulnerability of the shipping industry.

SLFFA Immediate Past Chairperson Tania Polonnowita Wettimuny 

Sri Lanka being a small nation, changes in our major markets do impact our daily business as well as industries as a whole and of course not forgetting growth and strategies that are taken by our neighbouring nations. The changes and the policies that are proposed and implemented by the Government or policymakers must take such factors into consideration whilst bearing in mind the demands of our key markets. As you know we all have to align our own businesses to meet and to cater to the demand of our local and global customers. 

Consequently, if the policies and decisions that are taken are more at a micro level rather than a macro level, a trade like ours , if not immediately, but very soon, will face not only tough competition but interest or focus on Sri Lanka will diminish. Hence consistency and continuity of key policies without politics and politicised decision-making is the need of the hour.

During these challenging times, to support our industry and SLFFA membership, the newly-appointed Executive Committee worked on specific areas during the year under review. Whilst most of these initiatives are mentioned in our annual report I would like to highlight a few areas.

•  To collaborate more effectively with other trade bodies and associations, to address key challenges and issues which impact not only our own business environment but our customers as well.
•  We have engaged more actively with all SLFFA members by maintaining an ongoing dialogue on the association’s activities and key projects.
• To widen the knowledge of SLFFA members and their employees by organising regular gatherings where they were exposed to presentations by experts and opinion leaders from different industries.
• To position the logistics and freight forwarding industry as a prospective career option for young professionals
• And to continue our focus on corporate social responsibility by supporting a common cause.

In this regard, I must thank and appreciate the efforts of the office bearers for 2016/17. As you know, we were forced to leap over many hurdles in the past year and this would not have been possible without the continuous cooperation of the regulatory bodies such as Sri Lanka Customs, the Director General of Merchant Shipping, Sri Lanka Ports Authority, AASL, SriLankan Airlines ground handling, who are integral stakeholders in our industry, and other trade-related associations such as the Shippers’ Council, CASA, JAAF, the Exporters Association and imports section of the Ceylon Chamber.

Monumentally, we as SLFFA have and always will comply with any initiatives that are brought in by the regulatory bodies or by policymakers to comply with international trade and commerce. Whilst I believe this is not the forum to go into specific details, it’s very disheartening to note that in some cases industry-related decisions were taken without proper consultation or guidance from our industry which we believe has adversely impacted many of our members in their day-to-day activities. 

‘Bad eggs’

Also, in recent weeks there were many articles related to the malpractices of service providers, importers and exporters as a whole. We as an association have taken great measures to eradicate and have always assisted the relevant authorities in bringing such culprits to light but one must understand that in any industry there are what are called bad eggs and good eggs. I sincerely believe our members, at least 99.99% of them, fall into the latter category. 

While we acknowledge the support of the Director General of Customs and also the Director General of Merchant Shipping, Sri Lanka Ports Authority, we must bear in mind that our collective vision should be to achieve the efficiencies and seamless trade facilitation practices which have been adopted by major commercial hubs such as Singapore and Dubai. 

Even though automation was discussed and it was widely anticipated to move ahead with great speed, over the years we have not seen much progress to simplify the process related to import and export by connecting all stakeholders to the single-window concept. 

Since we have with us today the newly-appointed Chairman of SLPA, we would like to highlight some important improvements which require the urgent attention of SLPA.

Sir, the shortage of equipment and machinery and labour issues from time to time has created delays , double handling, damages, losses with no compensation (particularly in the less than container load cargoes and multi-country consolidation cargoes), all resulting in higher than acceptable costs to clear out LCL and MCC cargoes, which in turn has impacted our customers’ daily operations. 

More distressingly, it is also disappointing to note the current status of our warehouse facilities within the port premises. While it is the country’s vision to promote the hub concept, very few initiatives and little emphasis have gone into the infrastructures development-related improvement of warehousing, CFS facilities to cater to our customers locally and overseas.

We call on you to actively support the participation of our neutral industry body, SLFFA Cargo Services’ initiatives and investment to provide services for urgently needed facilities for LCL and MCC cargo within the port without considering it being a threat or competition to the SLPA as this can potentially be a win-win for all parties. 

Further, on the same subject of infrastructure development in Ports, we are very excited to note the initiatives and efforts taken by the current Government to activate the Port of Hambantota. 

As we all understand, infrastructure is built considering the growth span of several decades and it is a task of the Government but at the same time involvement of the private sector and related industries is a must when developing a blueprint in order to make sure that what is being developed is properly marketed.

CASS

We are closely watching the initiatives being been taken by the Sri Lankan Government to restructure SriLankan Airlines and its associated activities such as ground handling. SLFFA has always advocated the need for a strong and efficient national carrier and level playing field and to this extent we welcome these initiatives as long as there is full transparency in the whole process. 

In this context, we urge the authorities not to permit the operation of the Centralised Cargo Agents Settlement System (CASS) in Sri Lanka as this is ill conceived for local market conditions and will ultimately have a serious financial cash flow impact on small- and medium-scale exporters, particularly those exporters of fruits, vegetables, ornamental fish and other live fish products and indeed on all perishable exports. 

The SLFFA also would like to mention that the newly proposed extension of BIA has not allocated space for logistics services, even though significant growth is seen in transhipments handled through BIA. 

We would like to urge the Chairman and the Board of AASL to look at our request both for the improvement of the existing air cargo village facility up to global standards and to allocate a possible area for logistics in your proposed expansion.

Similarly facing the grim reality, we are also hopeful that the megapolis development plan will as a top priority address the problem of traffic congestion and improve the road infrastructure of the city and suburbs which is a direct contributory factor to higher costs of export-import operations. 

In this backdrop, the role of the SLFFA Cargo Services Ltd, the industry commercial arm of the association, has also played and continues to play a vital role to lobby with the different industry groups, Government and related agencies to offer a superior level of services to SLFFA members by way of embracing new initiatives such as the e-air waybill and the 24x7 operating schedule adopted by the customs. 

In addition, the initiatives taken last year to establish a cargo handling terminal at the Port of Colombo by SLFFA cargo services was enhanced by the budget proposal to broad-base the handling of import LCL cargo and MCC cargo. We expect a further positive outcome in this area during this year and eagerly await the opportunity to facilitate affordable investments by all freight forwarders or members in this new project. 

I have already touched on how we see SLFFA cargo services being able to work closely to ease the problems faced with ocean LCL/MCC cargo within the port. I now would like to similarly call upon SriLankan Airlines to realise the value of the strategic partnership with SLFFA cargo services Ltd. which has coexisted for the past 23 years, providing invaluable services to air cargo importers and optimising the use of resources of each other rather than wasting resources competing unnecessarily on the ground.

We would also like to see SriLankan using its role as the sole ground handler to fast-track the process of e-AWB/e-booking initiatives which SLFFA cargo services has invested significantly in for the last four years to moot within Sri Lanka in conjunction with CCN. I would hasten to point out that the e-trading initiative if fast-tracked can potentially save the industry millions of rupees by way of the eradication of the duplicated paper trail and physical interface. 

Further, during the year under review, SLFFA made submissions to the Ministry of Finance requesting to allow the corporate tax component of freight forwarders to remain at the lower rate of 14%, which was accepted and incorporated into the 2017 budget proposals. This new tax will be applicable from the 2017/2018 financial year.

Learning and development initiatives

We also focused on promoting learning and development initiatives amongst SLFFA membership, employees of SLFFA members who are interested in joining the foundation certificate and the FIATA diploma programs are now offered at a 15% discount at AITT, SLFFA’S training arm. This year over 192 students successfully completed the foundation course and the certificate course, while a total of 80 students are registered for the current FIATA diploma program. 

Further, we also conduct dangerous goods regulation courses in order to enhance knowledge on dangerous goods handling. So far from 2007-2015 we have trained 240 students for the DG initial course and have conducted refresher courses for over 394 students.

SLFFA has invested a significant amount of money and continues to do so to ensure that it has updated programs for delivery of FIATA and IATA courses which meet the stringent standards of FIATA and IATA.

Through all these initiatives, we have encouraged school-leavers to select logistics as a viable profession by promoting the AITT programs through education fairs and also through targeted presentations at classes involving students who are following CIMA and other qualifications

During the year under review, the Ex-Co also focused more on interacting and networking with the membership. In addition to the quarterly breakfast meetings, general membership meetings were held in March 2016 and January 2017. We were heartened by the active participation of the SLFFA members at these events and we encourage all members to continue to do so.

In addition to these events, the very popular SLFFA Cricket Sixes tournament was held in October 2015. Despite the inclement weather, the tournament was completed successfully with the participation of teams from more than 50 member companies. We are currently in the process of finalising the logistics for the SLFFA Cricket Sixes 2017, which we are hoping to schedule in September this year. The Secretariat will update you in due course.

The SLFFA Dance was a moment of celebrated success. The much-anticipated event on the SLFFA calendar was held in grand style on 4 November 2016 at the grand ballroom of the Hilton Colombo. This event was once again a sold out event with over 500 people attending. We are very grateful to our main sponsor South Asia Gateway Terminals (SAGT) for their generous contribution and support towards SLFFA. 

As my term as chairperson has come to a close, I would like to take this opportunity to wish the incoming Chairman well and assure my fullest support to grow SLFFA from strength to strength under the new stewardship. 

I will be failing in my duty if I did not thank and show my appreciation to a few people who have supported the EXCO and me during the past two years. Our immediate past chairman Mr. Dushmantha Karannagoda, the Advisory Council, especially Mr. Diren Hallock, Mr. Tony De Livera, Mr. Mohan Mohanadas and Mr. Niral Kadawatharatchie for their guidance and support throughout the years; Mr. Rohan Induruwa, Secretary General and Mrs. Sushani Wijayatilake at SLFFA Secretariat for their support and all the hard work. 

Last but not least, the entire Executive Committee for their support and the members of SLFFA for placing their trust in me.

Looking ahead SLFFA members must realise that we operate in an ever evolving environment when our margins continue to diminish and global trade patterns fluctuate rapidly due to developments in the main markets. We should strengthen and resolve to develop future robust and cost-effective foolproof business solutions by focusing on improved efficiency, investing in technology-led customer solutions and more importantly delivering exceptional value to our customers. This I believe is our role as freight forwarders in this country as Sri Lanka marches on towards a future filled with economic gains and prosperity.

Thank you.

 Pix by Upul Abayasekara