Windfall for Colombo Port but systemic shortcomings prevail

Amidst the country having to confront multiple economic challenges due to adverse international developments, the impressive performance of Colombo Port over the past few months is a cause for positive vibes and good spirits. The operational revenue of the island’s premier port during last April had increased by 20% from the corresponding period in 2025 and Ports and Civil Aviation Deputy Minister had attributed the rise in port activities to operational constraints in Middle Eastern ports that have forced shipping lines to reroute transhipment activities, resulting in a significant inflow of cargo through Colombo Port.

When hostilities began in the Middle East 3 months ago, this column predicted that international carriers were likely to divert vessels away from the Gulf to ports in Asia due to the heightened security risk in the Middle East region and projected a surge in Colombo Port’s volumes. The Port has an outstanding reputation as a premier global transhipment hub located directly on major East-West shipping routes, and its strategic position offers rapid access to South Asian markets, the Middle East, and Africa, making it a critical connector for international trade. Its competitiveness is further heightened by deep container terminal depths that can accommodate the largest modern container vessels.

The cumulative container throughput handled by the Port from January to April 2026 reached 2,915,004 TEUs, reflecting a 14% increase, compared to the corresponding period in 2025. Meanwhile, the SLPA is planning for a new West Container Terminal (WCT) Phase II project involving a 3.4-kilometre breakwater with an investment estimated at around $ 600 million, which would create an additional capacity of around 3.3 million TEUs per annum. It is also reported that steps are currently being undertaken to accelerate the remaining phases of the Colombo East Container Terminal (ECT). The proposed expansions of the container terminals would further solidify Colombo Port’s standing as a major regional logistics hub along the East-West maritime trade route.

Nevertheless, increased transhipment volumes consequent to the outbreak of the war in the Middle East has intensified operational pressure at terminals, leading to growing yard congestion and delays in inter-terminal transfer activity, a critical component of Colombo’s transhipment operations. Hence, vessel schedules and terminal efficiency have been affected, and industry sources indicate that ships are facing berthing delays averaging 2 to 3 days, adding significant operational costs for carriers already dealing with volatile market conditions.

Even the SLPA Chief Dr. Parakrama Dissanayake had recently acknowledged that the Port was now operating close to capacity, creating congestion and vessel delays. The failure of successive governments in the past to expand the capacity of Colombo Port by developing container terminals on time has led to this disappointing situation.

The acute capacity constraint has contributed towards the deterioration of the Port’s competitiveness. According to the World Bank’s Container Port Performance Index, which identifies how fast vessels are turned around, Colombo port has fallen to its lowest recorded ranking since the measurement commenced.  In 2022, the port ranked 28th out of 348 ports. By 2024, its ranking dropped to 80th out of 403.

Another cause of concern is the inefficiency of the SLPA. The productivity of the SLPA-operated JCT is considerably less than the private-operated terminals. As per independent research published in 2024 by Charith Liyanaarachchi (a lecturer at Ocean University) - which examined crane productivity on vessel turnaround from 300 ships that berthed at the JCT, SAGT and CICT – it was revealed that crane productivity at the JCT averaged at 21 moves an hour, while the SAGT was at 30 and the CICT at 35.

As the SLPA is reputed for inefficiency and corruption, apprehensions prevail as to how the State entity would operate its flagship container terminal - the ECT. The construction of the ECT too was well behind the schedule, which drew severe criticism. To remain a State-owned commercial entity, the SLPA will have to ramp up its efficiency and competitiveness.