Red Sea crisis sees container boom in Colombo port

Traffic has grown by 80% in a few weeks, after many companies decided to abandon the Suez Canal route because of Houthi attacks, for the one circumnavigating Africa. But for Sri Lanka it risks being only a short-term gain. The political crux of Colombo's participation in the Red Sea mission.

Colombo (AsiaNews) - According to data from the Sri Lanka Port Authority (SLPA), due to the Red Sea crisis, the port of Colombo has increased the volume of containers transhipment from a ship by approximately 80%. to the other.

This is happening because the main shipping companies are changing their routes following the attacks by the Houthi rebels from Yemen: "The port of Colombo - explains the SLPA to AsiaNews - has emerged as a short-term transit point for the main shipping companies navigation to redirect their ships to the longer and more expensive route that passes through the Cape of Good Hope in South Africa".

Before the Red Sea crisis, around 5,000 container transhipments were carried out in Colombo per day: today there are over 8,000. According to some industry stakeholders, "although the port may benefit from the current crisis, due to the increased uncertainty surrounding passage on that waterway, these recent gains are unlikely to be sustainable for the companies in the long term" .

There are already early indications that some shipping lines will skip the Colombo port in favor of the shorter route from Singapore. However, in anticipation of sustained growth, the port is actively preparing to strengthen its capacity. The East Container Terminal which was semi-operational, has been set up to handle 7 million containers this year.

Recently President Ranil Wickremesinghe - who holds the portfolio of the Ministry of Defense - said he would provide a Navy ship in the Red Sea to help the international effort to repel Houthi attacks - at a cost of 250 million rupees every fortnight .

Sri Lanka therefore also intends to join the "Operation Prosperity Guardian" led by the United States Navy with a patrol vessel equipped with around 100 sailors. A decision that is being strongly criticized within the country's borders.

Sajith Premadasa, leader of the opposition and political alliance Samagi Jana Balwegaya, in parliament pointed the finger at this move by President Wickremasinghe last week: “The proposed deployment of our ships and military in the Red Sea should be examined in light of the pathetic state of the country's economy and the increase and expansion of the value added tax (VAT) from 1 January 2024 which has affected the most deprived. Why then should Sri Lanka undertake such a costly military operation, at a time when we are unable to meet even the basic needs of our citizens?”

Photo: Colombo Port Authority