(Commonwealth_ Vizhinjam, thanks to its strategic location and deep draft, is emerging as a strong contender to Sri Lanka’s Colombo Port for a share of the region’s transshipment volumes. A detailed analysis comparing the newly developing Vizhinjam to the well-established Colombo Port reveals compelling insights into the potential shifts in the transshipment landscape of the Indian Ocean.
The Vizhinjam Port Authority, having received approval from India’s Ministry of Shipping in April 2024 to operate as the country’s first dedicated transshipment port, marks a significant step toward India’s ambition of becoming a global manufacturing and shipping hub. Operated by Adani Ports and SEZ (APSEZ), Vizhinjam boasts cutting-edge automation designed to reduce vessel turnaround times and state-of-the-art infrastructure capable of handling the world’s largest container ships. In its initial phase, the port is expected to handle one million TEUs (twenty-foot equivalent units) annually, with plans for expansion to a full capacity of 6.2 million TEUs. Equipped to accommodate Megamax container ships, which carry 20,000-25,000 containers, Vizhinjam aims to fill a critical gap in India’s current port infrastructure, which has lagged in handling larger vessels and larger volumes efficiently.
Despite these advancements, Colombo Port remains the dominant transshipment hub in the Indian Ocean, capitalizing on its location along the major east-west shipping route between the Middle East and East Asia. Colombo serves as a key transshipment point for ports in countries such as India, Bangladesh, Myanmar, Pakistan, and the UAE. Ports like Chittagong, Yangon, Kolkata, Visakhapatnam, Chennai, Mumbai, and Karachi depend on Colombo’s centrality to connect to larger global trade routes.
However, concerns are growing regarding the future of Colombo’s transshipment dominance. India’s expanding port infrastructure, particularly with the development of Vizhinjam, could pose a serious threat to Colombo’s market share. Key performance indicators, such as transshipment volumes and the Port Connectivity Index, suggest that Colombo may be feeling the pressure. Between 2022 and 2023, Colombo experienced a slight downturn in transshipment volumes, followed by a recovery in 2024. A similar trend was noted in the Port Connectivity Index, which showed growth from 2019, followed by stabilization and then a drop in 2022-2023. This simultaneous decline in volumes and connectivity could indicate the early signs of competitive pressure from ports like Vizhinjam.
The Sri Lanka Ports Authority (SLPA) attributes this dip in cargo handling to seasonal variations and global economic trends rather than competition alone. SLPA insists that the decline in transshipment volumes seen at Colombo is part of a broader trend affecting ports worldwide due to global supply chain disruptions and fluctuating demand. The port has since seen a resurgence in 2024, signaling that it is adapting to these challenges and reaffirming its importance as a transshipment hub in the region.
On the other hand, Vizhinjam Port’s proponents argue that the port is ideally positioned to challenge Colombo’s dominance. Located at a critical chokepoint in the Indian Ocean, Vizhinjam is strategically connected to other major maritime chokepoints such as the Strait of Malacca, Bab el-Mandeb, and the Strait of Hormuz. Its proximity to emerging secondary trade routes, especially those in the rapidly growing Southeast Asian region, offers a unique advantage that could attract international shipping lines seeking to avoid the delays caused by congestion and operational disruptions at Colombo Port.
While Colombo Port remains a formidable player in the Indian Ocean transshipment sector, Vizhinjam’s rapid development and strategic advantages could lead to a shift in regional dynamics. Colombo’s well-established infrastructure and recent recovery efforts will help it maintain its position in the short term, but the long-term competition will likely hinge on how quickly Vizhinjam can scale its operations and whether Colombo can adapt to these new competitive pressures.
