STRATEGIC ROUTE
According to Rohan Masakorala, efficient logistics is essential for maintaining competitiveness in international markets. And it goes without saying that logistics has always been a cornerstone of successful global trade and Sri Lanka’s export sector is no exception.
“Timely delivery is one of the most critical aspects for products with a shelf life and retail market reach. As consumer patterns and supply bases evolve amid increasing competition, speed to market has become a key element of effective supply chain management,” he explains.
Sri Lanka’s strategic location along major international shipping routes provides a significant advantage; it enables quick access to key markets in the US, Europe and emerging regions.
However, Masakorala says that connectivity is as critical as geographical positioning.
He notes: “Connectivity plays a vital role in ensuring the seamless inward supply of raw materials and the outward delivery of finished goods. Efficient logistics not only impacts pricing but also accelerates supply chain processes and helps customers better manage their inventories.”
The COVID-19 pandemic, economic crises and geopolitical conflicts have underscored the importance of robust logistics systems. Masakorala points out that these challenges have created both hurdles and opportunities for Sri Lanka’s export sector, particularly in industries such as apparel where efficient logistics offset high domestic costs.
Sri Lankan exporters face a range of logistical challenges that threaten to undermine their global competitiveness.
“Border protection authorities play a critical role in the clearance of imported raw materials, particularly for industries such as apparel, which is our largest export segment. Inefficiencies in these processes significantly add to input costs for value added products,” he explains.
“Addressing self-inflicted challenges is essential for enhancing the competitiveness of Sri Lanka’s logistics sector”
Another key challenge is the outdated infrastructure and operations in Sri Lankan ports. Masakorala notes: “The Port of Colombo is approximately 15 years behind in capacity development. Haphazard and unplanned development has sent mixed signals to international shipping lines, resulting in some services being relocated to other ports.”
Delays caused by domestic inefficiencies exacerbate these issues. Sri Lanka’s Logistics Performance Index (LPI) ranking also reflects these shortcomings. While India has advanced to 38th position globally, Sri Lanka lags between 70 and 90.
“Addressing self-inflicted challenges is essential for enhancing the competitiveness of Sri Lanka’s logistics sector,” Masakorala declares.
Meanwhile, rising shipping costs and global supply chain disruptions have created additional challenges for Sri Lankan exporters.
He explains: “Exporters cannot simply recover the additional costs that arise from disruptions in the industry. Freight uncertainties and increased costs trickle down through buyers, retailers and consumers, potentially leading to demand disruptions in the long term.”
One of the root causes of high shipping costs is the inadequate capacity of the Port of Colombo. Compared to regional peers such as India, which have better plans and are offering favourable freight rates at present, Sri Lanka’s exporters face major disadvantages with the capacity crunch at the port.
He emphasises the need for reforms in trade facilitation and infrastructure development to enhance the island’s competitiveness. But despite these challenges, he remains optimistic about the potential of Sri Lanka’s port and logistics sector.
“Exports have been widely discussed as a solution to Sri Lanka’s economic challenges but little progress has been made in terms of focussed strategies and implementation. The National Export Strategy (NES) has been completely overlooked until now,” Masakorala laments.
