Transshipment decline at Port of Colombo extends to second straight month in February
The transshipment volumes at the Port of Colombo declined for the second straight month in February, as the services that earlier pulled out of Colombo, amidst heavy congestion, were yet to return to the port.
This marks a stark contrast to the robust growth the port experienced during the first and latter parts of 2024, when it benefited from the diversions caused by the disruptions in the Red Sea. The transshipment volumes dropped by 9.2 percent year-on-year (YoY) to 479,942 twenty-foot equivalent units (TEUs). This decline is particularly concerning, given the port’s strong performance in 2024, when it capitalised on the increased traffic from the Red Sea crisis.
However, mainline shipping lines earlier this year pulled some of their services out of Colombo, amidst heavy congestion.
Congestion at the Port of Colombo heightened late last year, as Sri Lanka Customs dramatically increased inspections in a last-minute push to meet the government’s revenue targets. The port’s operational conditions have returned to normal, mainly due to the withdrawal of shipping line services, which were yet to announce their return to Colombo. The contribution of transshipment to the overall container throughput also declined to 79 percent in February, from 82 percent a year ago.
Digitalisation is mooted as the solution to address the operational inefficiencies of the port. The Port of Colombo has been actively seeking to implement a port community system (PCS) to enhance efficiency and reduce corruption. Shipping agents have even given their consent to pay a reasonable fee for this service. In July last year, the tender process for the PCS was launched, with the assistance of the World Bank experts and after six to nine months of collaborative work with the Ceylon Association of Shipping Agents, to find a suitable investor. However, this initiative was later blocked and the government decided to implement the Maritime Single Window concept. A few months later, the government decided to move on to the National Single Window. Shipping industry stakeholders believe that the government should implement the initially proposed PCS to address the immediate operational inefficiencies.
“The proposed PCS can be later incorporated into the National Single Window when it’s ready,” a key shipping industry stakeholder told Mirror Business on the basis of anonymity.
Meanwhile, the Port of Colombo handled a total of 606,784 TEUs, reflecting a 6.1 percent YoY decline in February this year. The Colombo International Container Terminal, the port’s only fully operational deep container terminal, saw a significant 14.2 percent YoY decline in container handling, processing 246,694 TEUs in February 2025. Similarly, the Sri Lanka Ports Authority-run Jaya Container Terminal and East Container Terminal (ECT) handled 207,818 TEUs, recording a 2 percent YoY decline. In contrast, the South Asia Gateway Terminal bucked the trend with a 3.8 percent YoY increase in containerised cargo handling, reaching 152,272 TEUs.
The first phase of the Adani-led West Container Terminal (WCT) is expected to become operational shortly ahead of ECT, which is scheduled to be fully operational by end-2025. This is expected to put WCT in an advantageous position to attract services from shipping lines over ECT. Although ECT is currently partially operational, it is unable to offer full service to shipping lines, due to the shortages of yard equipment and unavailability of ideal trucks. Overall, these capacity expansions are anticipated to significantly reduce congestion and enhance the port’s ability to handle larger volumes of cargo in the second half of this year. The Port of Colombo welcomed 304 ships in February 2025, a 9 percent YoY decline compared to the same period last year. Container ship arrivals dropped by 10.9 percent, while the other cargo ships and ships for repairs saw increases of 83.3 percent and 25 percent YoY, respectively. However, ships for bunkering declined by 100 percent YoY, reflecting changes in fuel demand and shipping patterns.
Meanwhile, the total cargo handled at the Port of Colombo in February 2025 reached 8,087,857 tonnes, a 16.6 percent YoY decline compared to February 2024. Containerised cargo, which forms the bulk of the port’s operations, saw a 17.3 percent YoY drop, while break bulk cargo experienced an 8.1 percent increase, driven by higher volumes of iron and steel imports. Liquid bulk cargo also declined by 18.6 percent YoY, reflecting reduced volumes of crude oil and white oil. Dry bulk cargo handling, however, surged by 125.6 percent YoY, primarily due to increased imports of cement and other commodities.
Containerised domestic imports grew by 8.1 percent YoY, reaching 772,890 tonnes in February 2025. This growth was driven by increased demand for iron and steel, which saw a 26.6 percent YoY increase. However, domestic exports of containerised cargo remained relatively stable, with a marginal 0.6 percent YoY decline.
