(Commonwealth) _ The inauguration of container operations at Hambantota International Port (HIP) marks a significant shift in Sri Lanka’s container transshipment landscape, historically dominated by the Colombo port. HIP, situated approximately 250km southeast of Colombo and owned by China Merchants Port Holdings (CMPort), welcomed the 4,600 teu, MSC Ingrid, signaling the beginning of a new era.
During its visit, the MSC Ingrid discharged approximately 500 teu, designated to be transshipped to Rotterdam via the MSC Sky II, expected to dock at Hambantota on April 16. This initiative marks a diversification of container transshipment activities within Sri Lanka, demonstrating CMPort’s dedication to maximizing the strategic advantages of Hambantota International Port (HIP).
Johnson Liu, serving as CMPort’s chief representative in Sri Lanka, highlighted the collaborative efforts with MSC and detailed intentions to upgrade HIP’s infrastructure to accommodate larger vessels navigating the east-west shipping route. This strategic endeavor is geared towards strengthening Sri Lanka’s role as a pivotal regional hub, capitalizing on the inherent potential of the Hambantota International Port (HIP).
The decision to utilize Hambantota as an intermediate point for Europe-Middle East/India trade comes amidst schedule disruptions in the Red Sea-linked routes. Major container lines, including MSC, have redirected Gulf cargo through Colombo using feeder services due to suspended or disrupted direct calls to Saudi Arabia and other regional terminals.
While Colombo has reaped significant benefits from this rerouting, with volumes surging by 33% year-on-year in February, Hambantota’s emergence as a multipurpose cargo gateway presents a viable alternative. Although initially controversial, with criticisms highlighting flaws in China’s Belt and Road initiative, the acquisition of an 85% stake in Hambantota by Chinese merchants followed Sri Lanka’s inability to repay loans from the Exim Bank of China.
Since commencing operations in 2011, HIP has steadily evolved, with the second phase completed in 2015. China’s substantial investment, totaling $1.5 billion, underscores its commitment to bolstering Sri Lanka’s infrastructure. Despite initial skepticism, CMPort remains steadfast in its dedication to HIP’s development, aiming to position it as a premier service provider in the region.
CMPort’s established footprint in Sri Lanka encompasses the management of Colombo International Container Terminal, renowned for its substantial annual capacity of 2.4 million teu. Nevertheless, the burgeoning congestion issues plaguing Colombo, largely stemming from increasing volumes, emphasize the imperative for alternative transshipment hubs like Hambantota. As container traffic continues to surge, diversifying transshipment operations to relieve pressure on Colombo’s infrastructure becomes paramount. Hambantota’s emergence as a viable alternative presents an opportunity to alleviate congestion woes, optimize supply chain efficiency, and bolster Sri Lanka’s position as a key player in global maritime trade.
The expansion of MSC’s terminal partnerships beyond Sri Lanka, notably with India’s Adani Group at Mundra and Ennore, signifies the company’s strategic foresight in the broader subcontinent region. Adani’s upcoming container transshipment terminal in Colombo, alongside the Vizhinjam box hub project in southern India set to launch by late 2024, marks a pivotal shift in regional hub strategies. This development promises to reshape the competitive landscape by offering alternative transshipment options and enhancing connectivity across key maritime routes. Such initiatives reflect the industry’s concerted efforts to optimize operations and capitalize on emerging opportunities in the Indian Ocean region.
Amidst congestion challenges in Colombo and MSC’s active engagement with terminal partnerships, the evolving developments highlight the shifting landscape of container transshipment in the Indian Ocean region. While Colombo retains its pivotal role, the rise of Hambantota signals a paradigm shift driven by strategic investments and collaborative efforts among industry stakeholders.
