The Red Sea crisis has seen a surge in Colombo port transshipment

Due to supply chain disruptions caused by the Red Sea crisis, the flow of goods in the Middle East has increased, and the Colombo port has seen a surge in transshipment.

Transhipment volumes at the port of Colombo have increased by nearly 30 percent this year, and before the Red Sea crisis, these cargoes were traditionally transported via the Suez Canal on the Asia-Europe route.

The Sri Lanka Ports Authority said transshipment at the Port of Colombo accelerated for the third consecutive month in February, completing 530,000 TEU, up 29.1 per cent from a year earlier, continuing the double-digit growth seen since December.

The diversion of ships around the Cape of Good Hope due to attacks on merchant vessels in the Red Sea has caused the volume of trade through the Suez Canal to fall by half in the first two months of 2024.

While some smaller feeder services still transit in the southern Red Sea, it's risky for crews.

It is understood that due to capacity constraints, the port of Colombo is currently only able to handle 7 million TEUs per year. In 2023, the port will handle 6.9 million TEU compared to Jebel Ali (14.5 million TEU), Singapore (39 million TEU) and Salalah (3.8 million TEU).

To boost the port's handling capacity and make the port more competitive in ocean transhipment, Colombo is working on two major terminal developments - the West Container Terminal to be built by a joint venture led by Adani and the East Container Terminal to be expanded by the Sri Lanka Ports Authority, according to Deluri.

Eleanor Hedland, principal analyst at Delury Ports and Terminals, said in a webinar last week that while wait times before berthing at Dammam and Jebel Ali have increased from normal levels, the Red Sea crisis has not resulted in significant port congestion.

"When the Red Sea route becomes safe, the affected ports will see a large number of ship calls in the short term, but unlike during the outbreak, most ports are currently well able to handle short-term clusters of ships." In addition, we expect carriers and terminals to keep in mind lessons learned during the pandemic and manage vessel schedules carefully to avoid yard congestion." Hedland added.

Commenting on the impact of the crisis in the Western Mediterranean, Hedland noted that the Western Mediterranean hub, which includes Tangier Mediterranean and Sines, is strategically positioned to handle additional transhipment cargo to and from the central and eastern Mediterranean markets and to act as a transit point. That is, transhipment of goods outside the area through ocean routes.