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Tuesday, 6 August 2013 00:10 - - {{hitsCtrl.values.hits}}
By Cheranka Mendis
Q: How significant is the maiden call by a CMA CGM vessel to Sri Lanka’s CICT?
A: I think this is a very opportune moment for Sri Lanka today, as the economic indicators shows Sri Lanka on a forward advance. I landed this morning in the international airport and was pleasantly surprised by the international quality standards maintained there. The new port that I saw from outside is also very impressive. Everything is assembled for a big jump forward.
CMA CGM has been with the Hayleys Group for several years and we are delighted with them. We have a good positioning in Sri Lanka and intend to improve it by leaps and bounds after this event.
Q: Could you tell us about the vessel that called at CICT?
A: China Merchant Holding is an associate of CMA CGM and we have strategic ties and long-term relationships in the terminals in China, especially now, as they are our associate in the terminal link company. So it is part of the family. We deviated our ships especially for this event to signal to China Merchant our friendship, but also to signal to Sri Lanka that we are here to progress. The vessel CMA CGM Pegasus is an 11,000 TEU vessel, trading between Europe and Asia.
The new inauguration of your south terminal is a special event because for the first time in Colombo, major mega vessels can berth. Major mega vessels are those beyond 10,000 TEUs with a draft of 16 metres which cannot be accommodated entirely into the present terminals. China Merchant Terminal will accommodate them at 18 metres.
You are opening in Sri Lanka the door for deep sea mega carriers to come to Colombo. This is extremely important; and is a sign that deep sea mega carriers can now come regardless of their draft.
Q: Has CMA CGM had the privilege of making such a call in any other terminal openings?
A: We are definitely privileged to be part for this terminal opening because of our relationship with Sri Lanka, with the Hayleys Group and with China Merchant. Our vessel has cargo to discharge and cargo to load. We will be sending out the signals for others to say it is possible to go on more draft and call in Sri Lanka.
We have had such privileges more or less in other places around the world such as Zeebrugge in Belgium (a transhipment port), etc.
Q: How is the linear shipping market faring in Asia and the rest of the world?
A: The market in Asia is directly linked to those who import cargo manufactured in Asia. That includes USA, Europe, Mediterranean and the Arabian Gulf and so on. The concentration should be more on the importer side rather than the exporter side.
On trade, the market was fairly acceptable except on Asia-Europe and that was in the period from January this year to June. This was because of overcapacity. There were more ships than TEUs to offer. A month ago, in July this year, which is the peak season of Asia-Europe trade, the capacity matched the volumes and the market freight rates picked up. They were at a very low rate and now they are more or less acceptable, I hope this situation continues.
Q: What challenges do lines face and what role can ports and terminals play in this situation?
A: On mega carriers and normal carriers, the port stay is important, i.e. the time spent at port and the cost paid in the port. When a port or terminal is performing correctly in productivity, the ship will stay for a shorter period than if the port was performing slowly. If it performs well then the ship can sail ahead of time, at low speed, so to save on fuel; whereas if we have a lousy productivity in a port we will go on super speed to catch up on the schedule and we will spend much on fuel, which is unacceptable. The challenge of terminals therefore is productivity. For the ports and terminals an acceptable rate in transhipment or in this case load and discharge is also important. In Sri Lanka you are now very well equipped in this sphere.
Q: Any recommendations for improvement?
A: Where Sri Lanka can improve if you want is by making the Port of Colombo a free port. You will encourage much more manufacturing and much more transhipment and much more imports and exports. By free ports I mean duty free – manufacturing takes place in the area of the free port free of duty like in Dubai and Malta. So they can have manufacturing there, bring in parts, assemble or manufacture and re-export.
You are privileged because you are in a very good geographical location. That is certainly the cherry on the cake for Colombo.
Q: How has CMA CGM endeavoured to serve its customers in Sri Lanka and the Indian Sub Continent?
A: At this moment we serve eight trades from Colombo. We serve the trade from here to East Africa, West Africa, Far East Asia, Europe, East Med, West Med, Australia, and to Russia. Lot of tea going from Sri Lanka to Russia is carried by us. We also serve trade from here to USA as well.
With the opening of the new terminal CICT, and in the future the west and east terminals, this will be a call for mega carriers to come to Sri Lanka. And if you get the free port situation over the next two to three years, you will make a big leap forward.
Q: What is your current market share and volumes?
A: At the moment our market share is little less than 6% in Sri Lanka, in the overall trade in the region – in transhipment and local. We can improve on that. The purpose of my trip here is twofold – to be present at the inauguration of CICT as well as to see how we can develop further. I had a meeting with the Hayleys Group to see how to develop and grow in the market and I think we have come up with some good measures to be taken in this regard. Unfortunately I am not in a position to reveal these measures as at now.
Q: What prospects does CMA CGM see in container trade in Sri Lanka and within South Asia?
A: Regional port activities of CMA CGM show volumes at 16,670,674. Sri Lanka can capture at least half of this volume, as these are volumes that go from Nhava Sheva, Mundra, Chennai, Tuticorin, Cochin, etc.
These volumes may be taken up by Colombo as a transhipment hub. It is up to Colombo to encourage such transhipment. How this can be done is with authorities putting in place low port charges and from terminals to see encouraging load discharge trade in transhipment so they bring in business.
When they bring the business in, then they can increase the rates a little; but in the beginning one has to attract first and this can be done through low charges. In 2012 Sri Lanka has handled 260,000 TEUs, which adds up to a volume of 4,183,018.
Q: What is CMA CGM’s perspective on Sri Lanka’s aspiration to become a maritime hub?
A: You have all the chances – a deep sea port for mega carriers, a beautiful geographic location at the door of the subcontinents of east coast and the west coast and a place where you have free trades and a growing economy with a stable government. We are happy with the present conditions.
Q: Any regulatory measures that will add a further boost to this?
A: Yes, get the free port concept in place.
Q: What are your thoughts on the development of the port and future of the maritime industry in Sri Lanka?
A: We have seen a new and major development as Sri Lanka opened its Colombo International Container Terminal. We will develop ourselves in the same way.
Today we are in the fifth position in Sri Lanka in terms of carriers from 26 operating carriers. We are going to be better than that and acclaim fourth or third position soon.
With Colombo putting up measures friendly to the shipping industry where manufacturers can operate exports or imports, this will bring in the atmosphere of good business and honest development in this part of the world.
Q: What are your observations on Sri Lanka?
A: This is the first time I have come to Sri Lanka. I am very surprised to see the infrastructure coming up very quickly after the war. I have also noticed that whenever you discuss a matter, there is a solution; this is very important. We are very happy as a shipping company owner in this regard. I believe you are on the right path now. We would like you to be the first hub in the South East of Asia and we will be there to accompany you to this victory.
