Importance of inland container depot services in Sri Lanka

Monday, 14 March 2022 00:00 - - {{hitsCtrl.values.hits}}

Marine containers were introduced to the local shipping trade in the mid ’70s, and soon after the Government of Sri Lanka invited the private sector to come forward and invest in operating Inland Container Depots (ICDs), due to the acute shortage of storage space in the Port of Colombo at that time. Container movements further increased in the Port of Colombo due to Ceylon Shipping Corporation commencing its Container Liner Service in the year 1980, as a joint venture with Neptune Orient Lines (NOL) of Singapore.

Further, some of the leading international container shipping lines such as American President Line, American Export Line, P&O, Watermen, Nedlloyd, K-Line, etc. also, contributed to enhance the volume of activities in the Port of Colombo in the ’80s.

Ceylon Shipping Corporation operated four Container Liner Services to South East Asia – UK continent, Far East, Arabian Gulf and Red Sea which had a weekly sailing frequency at Port of Colombo all of which drove the Ports Authorities to modernise their terminals with container handling equipment, gantry cranes, etc. thereby facilitating Colombo Port as the Hub Port in the region.

As a result of above, Sri Lankan entrepreneurs made considerable investments in setting up ICDs within close proximity to the Port of Colombo and consequently the Association of Inland Container Depot Operators (ACDO) was formed in 1983 by a group of depot operators to protect the interest and address the concerns of legitimate depot operators.

At present, there are 23 licensed Inland Container Depots in operation within 20 km radius of the Port of Colombo. These ICDs occupy a total land area of approximately 110 acres. Large investments have been made in setting up and developing the ICDs with necessary infrastructure and equipment to provide space for storage of around 60,000 TEUs. The total value of these investments amounts to approximately Rs. 30 billion.

The core business of the ICDs is to provide storage, handling, cleaning and repair services for marine containers belonging to foreign shipping lines, NVOCC lines and international container leasing companies based on a US$ Tariff, which is also, a source of much needed foreign exchange to the country. ICDs also play a pivotal role in providing services to importers and exporters by being the physical link of the shipping line/agents and their end customers. Hence, ICDs are not only recognised as an extension of the Port but are also, considered as an Essential Service Provider during emergency periods.

ICDs provide direct/indirect employment for over 5,000 personnel. ICD operating companies have diversified their services to managing warehouses, distriparks, container freight stations, handling fleets of prime-movers and trailers used for container transport by road, container conversions – steel structure fabrication, etc.

An industry professional stated, “At a time where international shipping lines are enjoying high profitability, the Inland Depot Service sector can be another key USD revenue earner for Sri Lanka.”