ECONOMYNEXT – Sri Lanka’s factories are hit by raw material delays and exporting are missing ships while as containers languish in trucks awaiting Customs clearance, the island’s business chamber said in a joint statement.
“The manufacturing sector is struggling with material delays and …. this overall situation threatens Colombo’s status as a transshipment hub and poses serious risks to the overall economy,” the Chambers said in a statement.
“Further, exporters are facing potential delays with imported inputs, missed shipping opportunities, and increased processing costs, undermining their competitiveness in the global markets and foreign buyer confidence in Sri Lanka.
“Reports indicate that ships are bypassing Colombo for more efficient neighbouring ports which would be a permanent shift, resulting in lost container volumes for the Colombo port and rising freight rates, along with additional costs for freight forwarders and shipping lines.”
Hundreds of import containers are inside the port and others are queued for long hours on approach roads awaiting entry to the port as Sri Lanka Customs inspects containers physically.
The Chambers propose the use of green channel for low risk containers from companies that have a good record and several other measures to speed up clearing.
Short-term (within the next two weeks):
1. Swiftly implement Scanning and Screening Systems to address the backlog: Empower 24/7 operations for screening units to streamline container processing. Incorporate other border agencies like SLSI, Food Inspection, Plant Quarantine, Animal Quarantine etc. into this unit to fast track the approval process. Resulting containers to be released based on scanning reports, eliminating the need for additional physical examinations unless there is a serious observation. Ensuring work by officers occurs continuously during working hours including other government officers required for clearing. There could be shifts to cover the 24 hour requirement in the near-term to cover the backlog.
2. Leverage existing data on importers to expand the Green Channel: The risk management unit has extensive data on the companies which are registered with them for imports. Utilize this data to identify low risk cargo and expand the exemption facility along with the green channel facility to overcome the crisis.
3. Fast-track approvals for Authorized Economic Operators (AEO) and Customs Economic Operators (CEO)- allowing low-risk cargo to bypass excessive inspections.
4. Expand the Risk Management Processes: immediately correct the duplicating HS codes in the system which are subject to additional border agencies’ approvals. For example if SLSI approval is to be obtained in advance and if it is approved by SLSI, the Customs’ Asycuda system requires that particular HS code for RCT examination. Customs screening unit can based on the SLSI prior approval, releasing containers instead of directing them to RCT for Customs examination
5. Reconvene the Speedy Clearance Committee: In the past, there was a committee comprising public and private officials to fast-track clearance. Such a Public-Private committee can be established with representation from Chambers and related associations to streamline the approval process.
6. Expand the Customs “Out Panel Examination Facility” for a period or increase staff from Customs long room after office hours at RCT to increase the number of containers to be examined and released on the same day for a period. This action will immediately resolve the congestion until the medium-term solutions are met.
Medium-term (within the next 3-6 months):
1. Expand Container Yard Capacity: Identify and utilize underutilized container yards near to the Colombo Port to ease space constraints.
2. Digitize Operations: Prioritize end-to-end digitalization of Customs processes, risk management systems, and approvals to reduce delays and enhance transparency.
3. Strengthen Manpower: Rehire experienced retired customs officials to address manpower shortages and improve operational efficiency.
4. Enhance Accountability: Introduce a structured framework for monitoring implementation and holding relevant parties accountable for operational lapses.
5. On-board a further 50 companies on the AEO/CEO program: This will support in facilitating faster clearance.
We urge the Government to swiftly consider the above recommendations and look forward to engaging with the Government in speedy implementation of the above recommendations.
The above recommendations are proposed by the following Chambers and Associations:
1. The Ceylon Chamber of Commerce (CCC)
2. American Chamber of Commerce in Sri Lanka (AMCHAM)
3. Association of Clearing & Forwarding Agents (ACFA)
4. Association of Container Transporters’ (ACT)
5. Association of Inland Container Depot Operators (ACDO)
6. Association of NVOCC Agents (SLANA)
7. Ceylon Association of Shipping Agents (CASA)
8. Ceylon Freight and Logistics Association (CEYFFA)
9. Ceylon National Chamber of Industries (CNCI)
10. CHA Traders Association
11. Chamber of Construction Industry of Sri Lanka (CCI)
12. Chamber of Young Lankan Entrepreneurs (COYLE)
13. Container Transport Owners’ Association (CTOA)
14. Customs House Agents and Wharf Assistants Association (CHAWAA)
15. Essential Food Commodities Importers & Traders Association (EFCITA)
16. Exporters Association of Sri Lanka (EASL)
17. Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL)
18. Imports Section of the Ceylon Chamber of Commerce
19. International Chamber of Commerce Sri Lanka (ICCSL)
20. Joint Apparel Association Forum Sri Lanka (JAAF)
21. National Chamber of Exporters (NCE)
22. Sri Lanka Apparel Exporters’ Association (SLEA)
23. Sri Lanka Logistics & Freight Forwarders’ Association (SLFFA)
24. Sri Lanka Logistics Providers’ Association (SLPA)
25. Sri Lanka Shippers’ Council
26. Sugar Importers Association
27. The European Chamber of Commerce of Sri Lanka (ECCSL)
28. The National Chamber of Commerce of Sri Lanka (NCCSL)
29. Women’s Chamber of Industry and Commerce (WCIC)
