Ships divert to India as Sri Lankan economy continues to free fall

Sri Lanka’s ongoing economic free fall and unrest have compelled merchant vessels to divert to the ports of South India, leading to a surge in the port traffic. According to industry bodies, the diversion is a result of port congestion and shortage of fuel in Sri Lanka.

A good chunk of the normal cargo is getting diverted to Cochin and Chidambaranar port in Thoothukudi. Non-availability of fuel is the basic issue in Colombo. However, this is an opportunity for the Indian ports,” said

S Narasimhan, President, India-Asean-Sri Lanka Chamber of Commerce and Industry

As a result of the ships diverting from Sri Lanka to India’s South and West coasts since a few months now, several Indian ports including Mumbai, Paradip, Chennai etc. have seen a double digit growth. Among commodities, coal saw around 19 per cent rise, while container traffic grew by an average 5 per cent across all the ports.

This is advantageous for both ports in South India and those ports in major manufacturing states. Some of the main line operators and container operators may look at alternatives in India now, considering the long-term advantage, if the crisis intensifies,”

Jagannarayan Padmanabhan, Director, Transport and Logistics at CRISIL

Kochi International Container Transhipment Terminal (ICTT) in Vallarpadam has seen a 37% and 14% surge in transhipment and container traffic, respectively, during the first three months of the financial year. In the case of ICTT, transhipment traffic increased from 26,698 TEU (twenty-foot equivalent unit) during the first quarter of 2021-22 to 36,627 TEU during the first quarter of 2022-23. Similarly, Ennore and VO Chidambaranar have seen a rise of 25% and 16% respectively.

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