Freight rates continue to rise with rising oil prices, feeder services get costly. Southern India shippers — predominantly tethered to foreign transshipment in the absence of sufficient direct mainline connections out of home ports in Tamil Nadu — are facing a new challenge: rocketing feeder charges at Sri Lanka’s Colombo Port.
The average feeder fees from Cochin or Tuticorin to Colombo have doubled in recent weeks, hitting 200 US dollars per TEU, as compared to 95 US dollars per TEU a few weeks ago.
Other factors constraining feeder shipments from India and timely removal of containers at Colombo include the tightening foreign exchange situation in Sri Lanka after the local rupee sharply depreciated against the US dollar, while internal remittances — mostly generated by the country’s mainstay tourism industry — declined amidst the pandemic disruption. All these factors have made the products of south Indian shippers not competitive in international markets.
Till 2005 mainline vessels were calling at VOC Port Tuticorin. The south Indian port had direct connectivity through weekly services to Ports in United States Europe and china.
Since the port neglected its infrastructure modern container vessels stopped calling at VOC Port. The port since has been reduced to the status of a feeder port depending on Colombo port for its existence.
With modern container terminals coming at both Colombo East and Colombo West, the VOC Port’s dependence on Colombo would cotinue to increase. The industry is also upset the government has decline to provide the status of transshipment port to Tuticorin. The shipping ministry has also abandoned the Colachel transshipment terminal project for which Union cabinet had given in principle approval in 2015. The shipping ministry is currently building a massive container terminal in Nicobar Islands.