By Roy Denish
Sri Lanka’s maritime oversight faces criticism as industry groups warn that excessive shipping fees are increasing import costs and weakening exports.
COLOMBO – Industry stakeholders have raised fresh concerns over regulatory oversight at Sri Lanka’s Merchant Shipping Division (MSD), warning that systemic weaknesses and unregulated intermediary fees are undermining the country’s trade competitiveness and effectively imposing a hidden tax on consumers.
Critics argue that weaknesses within the licensing authority have allowed specialised logistics intermediaries and shipping cartels to circumvent established regulations governing fair trade.
Although local legislation provides for market-driven, all-inclusive freight charges, inadequate enforcement has allegedly enabled certain operators to impose arbitrary handling charges and inflated documentation fees.
These developments threaten to complicate government efforts to increase export revenue and position Sri Lanka as a transparent and competitive regional maritime hub.
Impact on Trade and Supply Chains
Exporters warn that additional, potentially unauthorised surcharges directly increase production and shipping costs, eroding the competitive advantage of key export commodities such as tea, rubber and apparel in fiercely competitive international markets.
Importers face similar challenges at the Port of Colombo, where inflated delivery order (DO) fees—reportedly reaching Rs. 100,000 per container release in some instances—create significant financial and administrative burdens.
Industry groups note that these costs and associated delays can expose businesses to substantial demurrage charges, increasing operating expenses that are ultimately passed on to domestic consumers.
Economic and Governance Implications
Economists warn that the financial burden of regulatory inefficiencies can affect everyday consumers through higher retail prices for essential imports, including pharmaceuticals, food products and industrial raw materials.
Beyond the immediate financial consequences, analysts caution that perceived regulatory weaknesses could undermine investor confidence and negatively affect Sri Lanka’s standing in international trade assessments, including the World Bank’s Logistics Performance Index (LPI).
Industry representatives have called for stronger, more transparent regulatory oversight and stricter enforcement of statutory pricing requirements to eliminate unnecessary bottlenecks and restore accountability within the maritime sector.
Source/Credit:
Daily FT (Financial Times Sri Lanka, Wijeya Newspapers Ltd).
