Colombo Port faces declining efficiency despite record volumes, as experts warn Sri Lanka must fix customs, congestion and port governance.
Colombo Port decline has become a serious concern despite record container volumes, as experts warn Sri Lanka must urgently fix efficiency, customs and governance failures.
The Adani Ports-controlled Colombo West International Terminal (CWIT) presents a glimpse of what the country’s maritime future could look like.
Its quayside cranes, which move containers between ships and trucks, and yard cranes, which temporarily stack containers six high, are operated remotely from the terminal’s main building.
Data from crane-mounted cameras and sensors are used by teams, including young women not traditionally associated with longshore work, to move containers between ships, trucks and yards using joysticks.
Indian Adani Port’s CWIT unit is growing at record speed, handling 1 million twenty-foot containers, or TEUs, within just one year of commencing operations and with only eight quayside cranes, while civil works to complete the terminal continue.
At full capacity, Colombo’s newest and most technologically advanced port terminal expects to employ 250 people, up from 172 at present.
“We can then handle 3.5 million containers a year,” says Iresh Siriwardena, CWIT’s Chief Operating Officer.
With two other private sector-built and operated container terminals, SAGT and Chinese-owned CICT, and three state-owned terminals, Jaya, East Container Terminal, and Unity, Colombo handled 8.2 million containers in 2025.
That made it one of the world’s top 25 seaports by volume.
Record Container Volume
Number of twenty-foot equivalent containers handled, TEU, Mn.
Sri Lanka’s maritime sector has long claimed that it punches above its weight.
Colombo Port handles 0.8% of global container traffic, while Sri Lanka’s share of global trade is less than one-tenth of that, at 0.05%.
Major hub seaports to the east and west of Sri Lanka, Dubai at 2.3% and Singapore at 4.5%, handle far larger shares of global containers.
Sri Lanka is not a manufacturing superpower.
But it is a major hub for transshipment.
Punching Above Its Weight
Share of global container traffic and trade.
Shifting Economic Geography
During the 1980s and 1990s, global container seaport rankings were dominated by ports such as Singapore, Hong Kong, Rotterdam, and Kobe.
It was only in 1996 that Colombo Port’s container terminal at the time, the state-controlled Jaya Container Terminal, or JCT, achieved the 1 million TEU milestone.
Japan funded JCT’s first phase, which was completed in 1985.
China became the world’s factory during the 1990s, while the export success of East Asian Tiger economies helped ports such as Singapore and other Southeast Asian ports, including those in Malaysia, to grow rapidly.
The UN Trade and Development Organisation ranked Sri Lanka 20th globally for shipping connectivity in 2025.
That location advantage has helped Colombo rise since the mid-1990s.
Of the 8.2 million containers handled in 2025, 81%, or 6.6 million boxes, were transshipment cargo, meaning cargo dropped off by one ship for another ship to collect.
The global map of commerce has now shifted again.
Asian supply chains are moving away from China to new locations, including Southeast Asia and South Asia.
For Sri Lanka, the rise in Indian freight is especially important.
Already, Indian containers account for 45% of the cargo transshipped through Colombo.
Romesh David, former CEO of South Asia Gateway Terminals, one of the six terminals at Colombo, believes Sri Lanka is underestimating the scale of the Indian opportunity.
He recalls a comment made by Krishan Balendra, Chief Executive at John Keells Holdings.
In 2024, Chinese ports processed around 230 million containers, while all Indian seaports handled only 23 million, despite India’s 1.4 billion people outnumbering China’s 1.2 billion.
India’s economic growth will affect cargo in two ways.
First, its growing population and rising wealth will increase demand for imported goods.
Second, India is emerging as a manufacturing hub, partly because of changing trade flows and its rapid integration into complex supply chains.
However, India’s containerised freight remains only one-tenth of China’s.
So far, Colombo Port has benefited from India’s rise as a manufacturing hub and from the fact that Indian consumers are buying more imported goods.
More than 85% of India’s cargo is handled at Colombo, Singapore, and Malaysia’s Port Klang, with 45% of it handled at Colombo Port.
India now plans to add shipping and seaport infrastructure to meet at least part of this expected growth.
The Sagarmala 2.0 strategic plan calls for US$82 billion in port project investments by 2035, and an additional US$139 billion in maritime investments over the same period, according to data from India’s Ministry of Ports, Shipping and Waterways.
Away from the mainland, India is planning a US$9 billion hub at Galathea Bay in the Nicobar Islands, located close to one of the world’s most important shipping routes.
India’s freight volumes grew at 5.2% annually over the past decade.
However, India’s container freight volumes could rise by 50% in five years and more than double in a decade if the country’s international trade grows faster than it did over the last decade and sustains an 8% annual growth rate.
Fifty Million Containers
Indian ports handled 23 million containers in 2025. Projected growth in the next decade, Million TEUs.
Given the strained relationship, India is unlikely to allow a major volume of its cargo to be transshipped at the Chinese-owned Hambantota International Port at Sri Lanka’s southern tip.
In 2025, Hambantota handled just 428,000 TEUs, while planned investments are expected to increase capacity to 2 million TEUs annually.
David says four factors determine the success of a transshipment port: capacity, efficiency, cost, and location.
“Colombo is a transshipment port,” he says. “We need to turn ships around fast.”
At 8.2 million containers in 2025, Colombo is handling more containers than ever before.
But its ability to turn ships around quickly has declined compared with competitors.
Declining Competitiveness
A widely watched rating, the World Bank’s Container Port Performance Index, or CPPI, measures how quickly vessels are turned around.
It shows Colombo Port has fallen to its lowest recorded level since the measurement began.
When the CPPI was first published, covering 2020 data, Colombo statistically ranked 17th globally and was the top-ranked port in South Asia.
In 2022, Colombo ranked 28th among 348 ports.
By 2024, it had fallen to 80th among 403 ports.
The pool of assessed ports increased by 55 over those two years, but Colombo’s rank fell by an alarming 52 places.
Colombo’s Slide
World Bank’s Container Port Performance Index, CPPI.
By container handling capacity in 2024, Colombo was the 28th largest seaport in the world.
But the World Bank’s CPPI measures efficiency only, or how quickly a ship can be turned around.
When JCT Phase 1 opened in 1985, Colombo was not yet in the global container port rankings.
Its rise to a top-25 global port by volume happened gradually through the 1990s and 2000s.
But beyond a certain scale, productivity becomes more important.
Passing through seaports is expensive and accounts for a significant share of the wholesale cost of goods.
Price-sensitive shippers look for prime ports that offer value, speed, and reliability.
Efficiency is vital in the competition for global transshipment market share.
Berth productivity, measured as moves per hour by quayside gantry cranes, is one key indicator.
CICT and SAGT, Colombo’s private sector terminal operators, compare well with some of the best ports in the world.
Research published in 2024 by Charith H. Liyanaarachchi examined crane productivity and vessel turnaround from 300 ships that berthed at JCT, SAGT, and CICT.
It found that crane productivity at JCT averaged 21 moves an hour, while SAGT averaged 30 and CICT averaged 35.
In February 2026, CWIT averaged 25 container moves per hour, according to Siriwardena, its COO.
On one occasion, a single operator moved 84 containers in one hour.
“We are on track to reach 28 moves per hour in the next year,” he says.
Automation or not, privately managed terminals are more productive.
“SAGT is not automated to the same level as CWIT, but its 600 people handle nearly 2 million TEUs annually, far above its 1.1 million design capacity,” says Siriwardena.
Before his role at CWIT, Siriwardena worked in several roles at SAGT for 25 years.
Potential At Sea
In August 2025, congestion at Colombo Port led Mediterranean Shipping Company, or MSC, one of the world’s largest cargo shipping companies, to reroute its Himalayan Express service through Vizhinjam seaport in India.
The Himalayan Express is a major weekly cargo route connecting South Asia to global markets.
“If you analyse the performance in 2025, we could have handled 10 million TEUs,” suggests Siriwardena, referring to Colombo seaport, “if not for the congestion.”
He says the gap between what Colombo handled and what it could have handled was not linked to capacity, but to operations.
Romesh David led the John Keells group-controlled SAGT for eight years.
He says transshipment is not a demand-led business but a capacity-led one.
“Seaports must have surplus capacity for shipping lines to build a network over your port,” he says.
Shipping lines do not make short-term bets.
Instead, they build networks over years, sometimes decades, based on confidence that the long-term capacity they need will exist.
“If there is uncertainty, limited capacity, and low productivity, don’t expect them to build a network around it.”
The world’s largest shipping lines, including MSC, Maersk, CMA CGM, and others, all maintain dedicated offices in Sri Lanka.
The chief executive officer of a global shipping line suggested that 15 new services could be routed to Colombo if the seaport had sufficient capacity.
A service refers to a weekly shipping route.
He added that if Colombo makes volume available, the port could attract as much as 30 million TEUs within five years, “eyes closed.”
“The demand is there, but the infrastructure is not,” said the international shipping line’s CEO, who requested anonymity because he had not obtained authorisation to speak to the media about Sri Lanka’s maritime sector.
Ships operating on the east-west route are gigantic, so 15 new weekly services by a major shipping line would be significant.
If each of those 15 services deployed a 15,000 TEU vessel, which is quite normal, it would theoretically add capacity of 11.7 million TEUs.
All 11 million containers would not be offloaded at Colombo, but several million could be offloaded and millions of boxes could be picked up by those services.
In April 2025, MSC’s Mariella, a 400-metre-long vessel and the largest to visit Colombo’s seaport, arrived with capacity for 24,244 TEUs.
For scale, if MSC Mariella’s full load of 20-foot boxes were lined up one after another, starting from Colombo seaport and running along the Southern Expressway, the containers would stretch 148 kilometres.
That is nearly the distance from Colombo seaport to Matara.
One solution is to make existing seaports and their related logistics networks more efficient rather than merely making them larger.
A comparison with Singapore, the world’s second-largest port by capacity and one of the most efficient ports in the world, shows how much Colombo can still gain.
Singapore’s old port is actually four dispersed container terminals and a separate bulk cargo port.
For this comparison, the bulk port has been excluded.
Terminal Rearrangement
Singapore ports land usage versus Colombo Port, 2025.
Tanjong Pagar, Keppel, and Brani Terminals, the oldest parts of Singapore’s port and visible from the left side of the bridge leading towards Sentosa Island, will be decommissioned in 2027.
Their business will be transferred to a new facility for which Singapore’s Maritime and Port Authority spent around US$1.8 billion on reclaiming land from the sea.
The facility, called Tuas Port, has its first stage already partly operational.
The old terminals next to Sentosa Island handle roughly as many freight containers as Colombo’s seaport.
Pasir Panjang Terminal, the fourth and largest, handled 34 million TEUs, taking Singapore’s total freight containers handled in 2025 to 45 million.
Singapore’s four older container terminals occupy 1,127 acres.
Colombo’s seaport occupies 1,160 acres and handled 8.2 million TEUs.
Singapore handled 45 million freight containers on 2,813 acres, including Tuas Stage 1.
Colombo Port’s real estate is also shared by the bulk cargo terminal, shipbuilding operations, and the Navy’s Western Fleet.
Even allowing generously for this, real estate utilisation is far better in Singapore.
Singapore Port, including Tuas 1, is 2.4 times larger than Colombo, but handles 5.5 times more cargo.
When all four terminals at Tuas are operational by 2040, capacity will exceed 65 million TEUs, making it the world’s largest freight-container port.
However, it will occupy only 3,300 acres, meaning it will be three times larger than Colombo Port while handling eight times more freight containers.
“That’s because Singapore’s optimised turnaround times are right,” says the CEO of a global shipping agency in Colombo.
Its Speed, Stupid
A large port can handle more freight.
However, it can also magnify inefficiencies, face environmental obstacles, and weaken investment returns.
For further gains, especially in the ultra price-sensitive transshipment market, Colombo Port must move past three obstructions: customs clearance, better use of yard space, and efficient inter-terminal trucking.
“All the drama that we see in the press about the inefficiency of the port is around how poorly we handle our gateway cargo, which is import cargo that is cleared from the port and export cargo that comes into the port for shipment,” says David.
Around 20% of cargo handled at Colombo Port is gateway cargo.
Sri Lanka Customs is the government agency responsible for controlling what enters and leaves the country.
In 2025, a customs time-release study showed the median release time for a Full Container Load, or FCL, import by sea cargo was 44 hours and 23 minutes.
This measures the time from the physical arrival of cargo at customs until final clearance.
An FCL shipment is for a single importer.
Sri Lanka’s Less than Container Load, or LCL, imports, where one container holds goods from multiple importers, take 77 hours and 54 minutes, or more than three days, to clear.
Sri Lanka Customs operates every day, around the clock.
A similar time-release study in 2020 by Singapore Customs showed an average import dwell time of 24 minutes, including the time needed to approve a permit, clear documents, and physically move containers out of the port gate.
Singapore’s process has more steps but takes far less time.
Time Study
Time release studies for customs clearance comparing Singapore to Sri Lanka.
The digital customs clearance platform ASYCUDA, or Automated System for Customs Data, is used by around 100 countries.
It logs declarations and assigns each a reference number.
Developed by the United Nations in the 1980s to bring customs processes into the digital age, it can make cargo clearance faster, traceable, and paperless.
But officials have argued that its systems conflict with Customs law.
Senior Deputy Director of Imports Anusha Fonseka and Priyanthi Wijenayake, Director of Exports, say an importer must submit documents such as the Customs Declaration, or CusDec, digitally through ASYCUDA and also physically print and hand them to customs house agents and border agencies such as the Sri Lanka Standards Institution for clearance approval.
Seven stations in the import and export process require printouts of documents already digitally submitted.
Printing itself is not the central issue.
The issue is that people must visit other people in offices to hand over documents at each stage.
“There should be virtually no human interaction, particularly in the import and export clearance process,” says David, pointing to what he sees as unnecessary duplication of steps already completed digitally.
Sri Lanka Customs media spokesperson Chandana Punchihewa says, “Officers release about 100 containers on some days by afternoon, on other days it can be just 20 boxes that have cleared. It depends on the officers and their mindset.”
Punchihewa was appointed Customs media spokesman in September 2025.
He has spent 29 years at Sri Lanka Customs after joining as an Assistant Superintendent.
Andre Fernando, Chairman of the Sri Lanka Logistics and Freight Forwarders Association, knows the challenges well.
Like shipping lines and ships themselves, he points to the success of “single window systems.”
These are digital platforms that centralise importers, exporters, customs, and all relevant border agencies for information exchange, payments, permits, declarations, and clearances.
No printing is required.
A paperless system would also reduce reliance on individual officers.
Proposals for a single window system in Sri Lanka are more than a decade old.
Sri Lanka ratified the World Trade Organisation’s Trade Facilitation Agreement in 2016, which requires member countries to establish a single entry point for traders to submit documentation and data to all relevant authorities.
The agreement came into force in 2017.
Sri Lanka has still not delivered a single window.
ASYCUDA, the digital CusDec submission platform, is used by customs.
Yet officials and border agencies continue to require printed copies of the same documents submitted through the system.
The evidence from other countries is difficult to ignore.
A World Bank case study published in 2013 showed that countries adopting a single window reduced average document preparation time by six days and customs clearance time by two days.
That was more than a decade ago.
Single Window
Countries that implement a single window system speed up border processes.
During COVID, however, when close contact risked spreading the virus, CusDecs filed through ASYCUDA did not require printouts.
“The agent who submits a CusDec will WhatsApp or SMS to the next officer with instructions on processing, including the unique ID number. That is all we used,” says Punchihewa.
WhatsApp, in effect, replaced the printed copy.
Soon after the pandemic ended, printed documents were again demanded.
Sanath Manjula, Chairman of the Container Transport Owners Association, representing truck owners that supply trucks to Colombo Port, alleges that “they reverted to manual processes as digital document submission risks eroding their unfair privileges.”
Subhashini Abeysinghe and Mathisha Arangala from think tank Verité Research, in a note titled “Sri Lanka Falls Behind Least Developed Countries in Trade Facilitation,” also argue that “successful implementation of trade facilitation reforms requires the ability to overcome resistance from border agency officials that fear losing the unfair privileges they have enjoyed for decades from the existing opaque, complex, and manual processes.”
Sri Lanka’s Customs law was enacted in 1869 and is one of the oldest laws in the statute books.
It grants several unusual privileges to the Customs Department and its officers.
Punchihewa points to the more than 150-year-old Customs Ordinance, saying the law requires printed documents to be submitted.
He says the Customs Ordinance Amendment of 1988, under clause 9C, is explicit.
“Where a customs officer requires any invoice and/or any other documents to be produced for any goods which have been imported, exported, entered for export or entered in transit, he may require such invoice and/or document to be submitted in original and may require him to submit as many copies thereof as may be necessary for the purposes of this Ordinance and he may retain such copies.”
“Due to the lack of legal cover, officers have resisted going fully digital,” Punchihewa says.
He adds that the fix has been ready for some time.
“I am a member of the Customs Ordinance Review Committee, which drafted an amendment to the law for digital submission alone to be admissible. It was submitted to the Attorney General’s Department, but nothing has come of it.”
However, in March 2026, Director General of Sri Lanka Customs Seevali Arukgoda said container releases at examination yards outside the port would move to an online system.
“We have introduced this system to ensure a transparent and accountable process, free from fraud and irregularities,” he said.
Faster border processes are the most critical way to improve Colombo Port productivity.
Faster cargo clearance would also free up yard space, where cargo must be stored until it is cleared.
Yard space productivity is the second major improvement needed to lift port productivity.
Whole Nine Yards
Delays at border control, including customs, create a chain reaction across the port.
Infrastructure constraints then deepen the dysfunction.
A customs delay snowballs through the port, filling yards and bringing trucks to a halt.
For example, an import container arriving at a terminal yard is placed there after being taken off the ship.
If it is classified as medium or high risk, it is moved to a yard outside the port where customs and border agency officials examine the cargo.
When inspections and clearance are delayed, inspection yards fill up.
Trucks then queue at inspection yards to unload new containers.
Other trucks queue outside terminal yards to deliver containers bound for inspection.
Unloading ships is delayed because congested yards must be stacked and restacked to make space.
Rohan Masakorala, Chief Executive of the Shippers’ Academy, a logistics training and advocacy body, says the slowdown is especially severe on the import side.
He says the problem is not customs alone.
Three yards are approved for import inspection outside the port: Rank Container Terminal yard, or RCT, Grayline Yard 1, and Grayline Yard 2.
“Limiting inspection to only these yards is a restrictive policy by the government,” he says.
“When thousands of containers are discharged for a week, these yards lack sufficient space to handle and discharge imports.”
Trucks queue everywhere: at inspection yards, terminal yards, and along roads inside the port.
The result is traffic congestion.
Manjula says some trucks wait up to ten days in queues and traffic jams.
Clogged terminal yards then spread disruption to transshipment cargo, Colombo Port’s main business.
“Then those containers get stuck in the terminal yards, which creates a chain effect of transshipment containers also not having enough space in the port to handle,” says Masakorala.
Inter-terminal trucking, or ITT, is the process by which trucks move containers between terminals for transshipment.
This is separate from trucks used to move import and export cargo out of and into the port.
Siriwardena says the situation is deteriorating because of higher transshipment volumes.
“Four years ago, SAGT handled approximately 56% of its transshipment cargo within its own terminal,” he says.
This meant a ship could drop off a container and another ship could pick it up from the same terminal.
New terminals such as CICT and CWIT have changed traffic patterns.
“Now there’s more cargo moving between terminals. So now SAGT loads approximately 34% of their transshipment cargo onto ships that are at their terminal.”
Internal road infrastructure connecting the terminals has not improved and remains two-lane highways.
“Some work was commenced to widen internal highways by adding two more lanes, but that work has now stalled,” Siriwardena points out.
According to Manjula, trucks moving between terminals averaged under 24 hours between 2020 and 2024.
In 2025, he says, that rose to around 36 hours.
He says the cause was government pressure on customs to plug revenue leaks, resulting in more inspections.
Singapore’s Maritime and Port Authority reports an average ship turnaround time of under 12 hours, covering the entire operation of transshipment, imports, exports, from berth to departure.
Although not directly comparable, in Colombo it takes 36 hours to move a container from one terminal to another.
To improve inter-terminal trucking, Fernando proposes replacing the fleet entirely.
“You can automate the inter-terminal trucking to a rail system,” he says, arguing for an electrified rail loop connecting the six terminals.
Manjula adds that smart gates at terminals and inspection yards could remove manual bottlenecks.
These gates would scan and verify digitally instead of requiring a physical printed gate pass to be handed to an officer.
“Make them smart gates, just like how the highway works, to scan quickly,” he says.
Funding is not the constraint.
The Sri Lanka Ports Authority earns billions of rupees in profits annually.
Hub Port Effect
The SLPA profits, Rs Bn.
Colombo is not one port.
It is two systems sharing the same waterfront and producing different results.
“There are two sides to these port operations. The private terminals run some of the most efficient in the world,” says Masakorala.
“We would love to place all our cargo at the private terminals,” says a source from one of the world’s largest shipping companies.
“But if there is no space, we have no choice but to go to a public terminal.”
Private Capital
The major change at Colombo Port is the result of an important policy shift.
In 2000, the government allowed the private sector to participate in building and running ports.
At the same time, it encouraged public terminals to move towards a “landlord model,” with the port authority providing common services such as tugboats and pilots while cargo operations were left to private firms.
Private capital funding public infrastructure is now called Public-Private Partnerships, or PPPs.
During the late 1990s, when the SAGT deal was arranged, PPP was not part of the usual terminology.
However, SAGT’s success, like that of all strong PPPs, came from addressing infrastructure challenges, tight fiscal space, growing demand, and jobs.
When PPPs are structured well, infrastructure users benefit from the innovation and efficiency that private capital brings.
But simply using private capital to fill infrastructure gaps is not guaranteed to solve problems.
The short history of PPPs also includes examples of investments that failed to meet expectations.
Masakorala says the fix must be structural.
“Government is the landlord, owner, operator and the regulator. That is the biggest problem for this port.”
“Remove the port authority as owner, operator and the regulator,” he says.
In 2017, he chaired the National Export Strategy, where 150 senior industry figures proposed a new shipping act, a new merchant shipping act, and a clear separation of logistics from ports and shipping.
Nothing came of it.
Opacity is another problem.
“We cannot do any analysis on performance with the SLPA because data is unavailable,” Masakorala adds.
“You go to Singapore, they analyse everything. The gate time is analysed, everything is analysed. These are things that will bring in reduced costs.”
He says transparency would help develop better solutions.
But he is not optimistic.
“Sri Lanka is going to be just another port,” he says.
“Not that dream mega maritime hub.”
