Shippers’ Council warns against repeal of all-inclusive freight rule

• SLSC Chair Sean Van Dort affirms regulation improved ship calls, volumes and port revenue
• JAAF Secretary General Yohan Lawrance says small exporters most at risk without rule
• FTZMA Chairman Dhammika Fernando criticises cautions of rising costs, lost competitiveness and job risks
• NCE Secretary General and CEO Shiham Marikar call for Govt. to consult industry before changing policy

In a united and impassioned defence of all-inclusive freight regulation, top representatives from the export, manufacturing and logistics sectors on Monday called on the Government to reject efforts to dismantle the landmark regulation that has governed freight transparency since 2013. 

At a joint press briefing held at the Ceylon Chamber of Commerce, Sri Lanka Shippers’ Council and other major trade associations warned that rolling back the regulation would open floodgates to 44 hidden fees, anti-competitive practices and price manipulation, harming exporters, importers and ultimately the Sri Lankan consumers. 

SLSC Chairman Sean Vandort was blunt in his criticism of what he called “parasites” exploiting the system.

“Every time a Government changes, the parasites re-emerge trying to break up the all-inclusive rule for undue profit,” he claimed. 

He said the lobbyists want to unbundle charges and push them onto exporters and importers, knowing that every rupee increase in goods and services eventually gets passed on to the consumer.

Vandort detailed the origins of the regulation, recalling how shipping agents in 1995 began levying a so-called “THC” or terminal handling charge — a fee with no legal basis and in 1997 this arbitrary charge was extended to exports, creating chaos. The Shippers’ Council, alongside chambers and Government agencies, fought back, culminating in the Gazette notification backed by then-President Mahinda Rajapaksa. The regulation mandated all-inclusive freight pricing, ensuring all costs, including any terminal charges, be bundled and negotiated transparently through market forces.

Since the Gazette came into force in 2013, Vandort asserted, all key metrics have improved despite fear mongering efforts by groups with vested interests. “Ship calls increased, import and export volumes rose, and port revenues grew. We have hard data since 2014 to prove this regulation helped the industry, not hurt it. The fears they stoked never materialised,” he said.

He pointed to Bangladesh as an example where the all-inclusive model is strictly enforced. “Other countries are now studying Sri Lanka’s approach. When an industry fails to discipline itself and exploits the public, the Government must step in. The law doesn’t prohibit charges, it simply requires them to be transparent and paid by the contracting party,” he pointed out.

Rejecting claims that unbundled freight charges reflect global norms, Vandort dismissed the notion of a uniform “global practice.”

“The ‘golden rule’ in shipping is clear— the contracting party pays. You can’t force a non-contracting party to bear unrelated charges. That’s the problem we’re trying to fix and why the law must stand,” Vandort asserted.

The Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence underscored how the regulation protects smaller exporters who have no leverage to challenge freight agents.

“When we hand over goods to a consolidator, we lose control of what happens next. Without this Gazette, brands could push costs down the line, and small exporters would be forced to absorb them,” Lawrence explained.

He also highlighted import-side abuses, where CIF shipments arrive with supposedly all-inclusive pricing, only for local service providers to tack on hidden fees like THC. “The law ensures these are covered in the original freight rate and billed to the party paying freight,” he added.

Lawrance warned that without the law, “There is no free market, just extortion.”

The Free Trade Zones Manufacturers’ Association (FTZMA) Chairman Dhammika Fernando was frank in his criticism of what he called “middlemen” exploiting the system.

“These people have no ships, move no cargo — they just sit in the middle and take a profit. The THC they imposed had no legal basis. That’s why we fought this in Court and secured the Gazette,” Fernando said.

He argued that resistance to freight liberalisation stems from fear of competition. “If Sri Lanka’s shipping was truly liberalised, exporters and importers would benefit. But these groups lobby officials to block it because they know they can’t survive in a fair market,” he charged.

Fernando warned of severe consequences such as eroded competitiveness, inflated prices, implicit tariffs, and unregulated charges. “We urge the Government not to let a handful of actors dictate policy that affects hundreds of thousands of livelihoods,” he added.

He also proposed cost benchmarking, operational audits, and stakeholder consultation as alternatives; not opaque fees. “Over 350,000 people depend on this sector. This is not just an economic issue, it’s a people issue,” Fernando added.

Echoing similar sentiment, the National Chamber of Exporters (NCE) Secretary General and CEO Shiham Marikar said the chamber’s 600 members spanning SMEs to large companies were unanimous in their opposition to any rollback of the legislation.

“Our members are already under enormous pressure post-COVID. They’ve taken on debt, seen financial costs soar and are barely staying afloat. Some are closing down, while others are exporting just to break even, hoping for better days,” he elaborated on industry realities.

Marikar insisted on the Government to consult the industry before any policy change. “Each time there’s a new administration, these lobbying groups return. But we, the Chambers, are working closely with exporters and can offer real ground-level insight,” he stressed.

“Sri Lanka’s exporters have come too far to be dragged down again by these unfair, hidden charges. This is not just a trade issue, it’s about integrity, transparency and national competitiveness,” he added.