annual report accounts...also a founder member of the association of shippers ouncils of angladesh,...

48th Annual General Meeting

ANNUAL REPORT

&

ACCOUNTS

2017/2018

SLSC Annual Report 2017/2018

SRI LANKA SHIPPERS’ COUNCIL

The Sri Lanka Shippers’ Council is the apex body representing Sri Lankan Shippers, which was established in March 1966 to protect and promote the interests of shippers. It was the first National Shippers’ Council to be set up in Asia and was formed on a request made in 1965 by the local Committee of the Ceylon/Continental Conference, and a subsequent request made by the Director of Commerce in January 1966, to the Ceylon Chamber of Commerce. The Council is also a founder member of the Association of Shippers’ Councils of Bangladesh, India, Pakistan and Sri Lanka (ASCOBIPS), founded in 1981 and the Asian Shippers’ Council, founded in 2004. Sri Lanka Shippers’ Council has become a member of the Global Shippers Forum in April 2015. The Global Shippers’ Forum (GSF) is the world’s leading trade association for shippers engaged in international trade moving goods by all modes of transport.

Membership of the Council consists of Chambers of Commerce, Trade Associations & individual organisations. The Managing Committee of the Council only consists of 14 Products Associations (PA’s) with voting rights. Currently, the Council represents a large percentage of the import/export trade in the country through its broad based representation and membership of these trade Associations and individual Companies.

The Council has now opened its doors to individual companies as Associate Members so that companies in the import/export trade could have access to the Council’s resources and expertise to resolve their shipping related problems. The Sri Lanka Shippers’ Council is headed by an elected Chairman and assisted by a Vice-Chairman who are also elected by the constituent members. The Ceylon Chamber of Commerce provides secretarial services to the Council and also acts as the Secretariat. The Council actively supports the Sri Lankan Government’s vision of making Sri Lanka the Logistics Center in the Asian region, which would result in the generation of enhanced economic activity, employment and wealth. As such all Council activities have been planned and prepared to support this vision and to facilitate International trade.


OUR VISION

“To enhance the competitiveness of our members by abolishing hidden logistics costs.”

OUR MISSION

We facilitate our customers to be more competitive in their Business Logistics; performance and cost, by the following;

1. Being the APEX Body, protect the interest of our customers and being a strong Advocate to the Government.

2. Ensuring cost effective strategies are developed and implemented in the logistics and value chain to make our members more competitive.

3. Facilitating greater efficiencies in logistics by reducing logistics barriers and simplifying trade.

4. Acting as the mediator in resolving conflicts amongst our customers (members).

5. Facilitating a level playing field by developing and promoting a code of conduct / ethics for our customers (members).

6. Establishing a centre for excellence for information sharing and to upgrade competencies of members to compete globally.

7. Leveraging regional and global partnerships and facilitating global best practices in logistics in Sri Lanka.

It is the Council’s firm belief that in order to be competitive with the international market Sri Lankan shippers should;

a) Have a clear understanding when deciding on Carriers /Freight rates and be clear and free of any ambiguity with regard to the Freight rates and matters prevailing in the Market.

b) Have freight and associated costs stabled, particularly for traditional exports

such as tea, rubber, coconut products, which account for at least 70% of total export volume out of Sri Lanka. A major part of the turnover of these exports in foreign exchange is retained in the country and it is vital to protect these industries from international competition. Furthermore, these commodities are with relatively low margins and usually with forward trading patterns cannot absorb constant and continuous cost escalations.

c) Concurrently are the major exports such as garments are usually traded on FOB

terms and the local manufacturers are constantly under pressure to provide low priced services, thus are unable to absorb any additional charges keeping in mind


that almost all material for these industries are being imported. Therefore the constant increases in charges could seriously affect such industries as they are called upon to pay these charges both at the point of import of raw materials and export of finished products.

d) Have reasonable Service providers who would not take undue advantage from

their captive customers.

OUR OBJECTIVES AND KEY BENEFITS TO MEMBERS

1. To provide for consultation/dialogue between shippers and Ship-owners/ Conference

Lines/Shipping Agents/Airlines/Airline Agents, Sri Lanka Ports Authority/ Customs and

Government on matters of common interest;

2. To bring together the representatives of various shippers' associations, trade and

industrial associations/organizations, for consideration and discussions of the problems

affecting shippers in Sri Lanka;

3. To represent the views of shippers in regard to the composition of freight rates,

availability and adequacy of shipping space and services including sailings / flights. Port/

Customs efficiency. Adequacy of Ports and Customs facilities and / charges

4. The Council in principal will not come into agreement on behalf of its members in

relation to freight contracts. (The Council will encourage confidential shipper/carrier

freight negotiations) However, if the circumstances necessitate negotiation and entering

into agreements with ship owners/Conference Lines/Shipping Agents/Airlines/Airline

Agents on matters affecting shippers, which involve general principles and policies or on

such other matters, if referred to the Council, upon receipt of such matters, the Council

will act to safeguard the interest of the shipper/Country.

5. To undertake research/studies on problems affecting shippers in Sri Lanka.

6. To circulate information and statistical data and to publish newsletters, brochures etc.,

for the benefit of shippers.

7. To convene independently or jointly with other organizations, conferences, seminars or

meetings in furtherance of the objectives of the Council;

8. To accept any grants, gifts or donations whether in cash or securities and any property

either movable or immovable and/or give any grants etc., in the furtherance of the

objectives of the Council;

9. To make Rules, Regulations or Bye-Laws for the conduct of the affairs of the Council and

to add, to amend, vary or rescind them as from time to time;

10. In the interest of the shippers, the Council will wherever possible nominate its members

to institutions where key functions in the shipping industry are taking place.

11. The Council will closely work with international Shippers' Councils in order to interact

and pass on information that could be beneficial for shippers and the country.

12. To take all such other steps as may be necessary or conducive to the interests of the

Councils' members.


THE COUNCIL

Mr. Chrisso de Mel Chairman

Mr. Suren Abeysekera

Vice Chairman

HONORARY MEMBERS

Late Mr. S.S. Jayawickrama Mr. Chullante Jayasuriya

SECRETARY GENERAL

Ms. Dhara Wijayatilake

SECRETARIAT

The Ceylon Chamber of Commerce


MEMBERSHIP – 2017/2018

TRADE ASSOCIATIONS

The Ceylon Chamber of Commerce Mr. Chrisso De Mel (Representative)

Mr. Russell Juriansz

(Alternate)

The Ceylon Chamber of Commerce Mr. Adrian Oswald Import Section (Representative) Mr. Rajiv Dharmarajah (Alternate) Joint Apparel Association Forum Mr. Suren Abeysekera (Representative) Mr. Imalka Kumarapeli

(Alternate)

The Colombo Rubber Traders’ Association Mr. Anura Edirisinghe (Representative) The National Chamber of Commerce Mr. Sujeeva Samaraweera of Sri Lanka (Representative) Mr. Tissa Ruberu (Alternate) The Ceylon Coir Fibre Exporters’ Association Mr. N. Ramanathan (Representative) Mr. Shavesh Mendis

(Alternate) The National Chamber of Exporters’ Mr. Shiham Marikar of Sri Lanka (Representative )

Mr. Parakrama Weerasinghe

(Alternate)


The Sri Lanka Freight Forwarders’ Mr. Jagath Pathirana Association (Representative) Mr. Rohan Silva (Alternate) The Sri Lanka Apparel Exporters’ Mr. Sean Van Dort Association (Representative)

Mr. Kumar Seneviratne

(Alternate)

Sri Lanka Association of Air Express Mr. Sanjeeva Abeygoonewardena

Companies (Representative)

Sri Lanka Logistics Providers’ Association Mr. Stanley Samarakoon (Representative) Tea Exporters’ Association Mr. Gehan Kuruppu

(Representative)

Mr. Shiral Fernando (Alternate)

Sri Lanka Fruits & Vegetable Producers, Mr. Zuraish Hashim Processors & Exporters’ Association (Representative) Hub Operators Association of Sri Lanka Mr. Amal Rodrigo

(Representative)


INDIVIDUAL MEMBERS

Advantis Freight Pvt Ltd Agility Logistics (Pvt) Ltd Ansell Lanka (Pvt) Ltd Anverally & Sons (Pvt) Ltd

Bollore Logistics Lanka (Pvt) Ltd

Care Logistics (Pvt) Ltd Ceylon Tea Marketing (Pvt) Ltd City Cycle Industries CL Synergy (Pvt) Ltd Control Union Inspections (Private) Limited C H Robinson Freight Services Lanka (Pvt) Ltd

20Cube Logistics (Pvt) Ltd Expolanka Freight (Pvt) Ltd Eskimo Fashion Knitwear (Private) Ltd Euro Substrates (Pvt) Ltd

Fascination Exports (Pvt) Ltd Fanam International (Pvt) Ltd Freight Links International (Pte) Ltd Freight Masters International Pvt Ltd Finlays Colombo PLC Green Horizon Enterprises (Pvt) Ltd

Hayleys PLC Hddes Extracts (Pvt) Ltd Hela Clothing (Pvt) Ltd Hellmann Worldwide Logistics (Pvt) Ltd Imperial Teas (Pvt) Ltd

Industrial Clothings Ltd Jiffy Products S.L. (Pvt) Ltd Kokosfibre Exports (Pvt) Ltd


MAC Holdings Pvt Ltd Mabroc Teas (Pvt) Ltd Neil Fernando & Co. (Pvt) Ltd Nestle Lanka PLC

SALOTA International (Pvt) Ltd

Scanwell Logistics Colombo (Pvt) Ltd

Shermans Logistics (Pvt) Ltd

Siam City Cement Lanka Ltd

Singworld Lanka (Pvt) Ltd

Star Garments Pvt Ltd

Tea Tang Ltd

Timex Garments (Pvt) Ltd

Trelleborg Lanka (Pvt) Ltd

Trans Orbit Logistics Pvt Ltd

UK Beverages Pvt Ltd

Universal Freighters International (Pvt) Ltd UTI Pership (Pvt) Ltd Van Rees Ceylon Ltd


The Sri Lanka Shippers’ Council AGM 2016/2017

Seated from Left to Right Ms. Manori Dissanayaka (Secretariat), Mr. Dinesh de Silva (Past Chairman, Import Section of CCC), Mr. Gehan Kuruppu (Tea Exporters’ Association), Mr. Suren Abeysekera (Joint Apparel Association Forum), Mr. Chrisso De Mel (Chairman – the Ceylon Chamber of Commerce), Mr. Sean Van Dort (Immediate Past Chairman), Ms. Tania Polonnowita Wettimuny (Sri Lanka Logistics & Freight Forwarders’ Association), Mr. Dimithri Perera (Sri Lanka Association of Air Express Companies), Ms. Ushani Dassanayaka (Secretariat) Standing from Left to right Mr. Sujeeva Samaraweera (The National Chamber of Commerce of Sri Lanka), Mr. Parakrama Weerasinghe (National Chamber of Exporters’ of Sri Lanka), Mr. Kumar Seneviratne (Sri Lanka Apparel Exporters’ Association), Mr. Amal Rodrigo (Hub Operators Association), Mr. Adrian Oswald (The Ceylon Chamber of Commerce – Import Section), Mr. Chullante Jayasuriya (Honorary Member), Mr. Shiham Marikkar (National Chamber of Exporters), Mr. Ajith Jayasekera (Sri Lanka Apparel Exporters Association), Mr. Jagath Pathirana ((Sri Lanka Logistics & Freight Forwarders’ Association), Mr. Anura Edirisinghe (Colombo Rubber Traders Association), Mr. Tissa Ruberu (The National Chamber of Commerce), Mr. Stanley Samarakoon (Sri Lanka Logistics Provider’s’ Association).


OFFICE BEARERS Sri Lanka Shippers’ Council held its 47th Annual General Meeting on the 16th June 2017 at 5.30 pm at the Cedar Room, followed by Post Business Session and Cocktails at the Atrium, The Cinnamon Grand Hotel, Colombo. The Chief Guest and the Keynote Speaker of the Event was Hon. Dr Harsha de Silva, Deputy Minister of National Policies and Economic Affairs and a leading Economist in the Country. Mr. Chrisso de Mel was elected as the Chairman and Mr. Suren Abeysekera was elected as the Vice Chairman for the year 2017/2018.

ACTIVITIES OF THE COUNCIL

The activities of the Council have been focused on issues faced by shippers on shipping and their operational activities. The Council always performed a lead role in resolving problems and serve as the focal point where various shipping and port, Airport & other authorities’ related matters are brought up and discussed. In addition, the Council largely contributes in advising the Government authorities on matters relating to port and shipping whenever its advice is sought after. The following ten (10) action committees were appointed for better co-ordination and guidance purposes:

Shipping and Logistics related Matters

Present Market Indicators

Customs/Sri Lanka Ports Authority/Maritime Affairs

Airport Issues

Education and Seminars

Membership Drive, Fund Raising & Finances/Accounts

SLSC Constitution

Asian Shippers Alliance (ASA) & Global Shippers Alliance (GSA)

Global Shippers’ Forum (GSF)

SLSC Website

SHIPPING SURCHARGES Sri Lanka Shippers’ Council continue to engage the authorities in maintaining the status quo of transparent and all inclusive freight structures to be market driven.


During the year under review, it was noted that many vested parties were lobbying to mislead the authorities to bring back unethical, anticompetitive practices once again by revoking the GAZETTE EXTRAORDINARY 1842/16 DATED 27.12.2013.

Sri Lank Shippers’ Council will continue to support the Government and its membership to uphold fair trading practices in a transparent business environment for the benefit of importers, exporters and shipping lines and agency network. During the year under review, the Council advised its members to take up any matters relating to unethical charges by the service providers to the Director General of Merchant Shipping with the supporting document.

MARKET CONDITIONS

Various predictions on market conditions were discussed at Council committee meetings. China Freight Index (China Exchange) was followed by the Council as reference material.

Container shipping market It was reported that the continuing crisis affecting most sectors of the shipping industry, and in particular the container shipping industry, arising from the 2008 financial crisis. It was predicted that the after effects of the financial crisis would continue to adversely impact the industry in 2017. Although there have been some recent signs of recovery in container spot market rates, rates generally have remained subdued. The severity of the continuing financial difficulties besetting the liner shipping sector was underlined by the unexpected bankruptcy of Hanjin Shipping in 2016, a top-10 line in the container league rankings. The prospects for the shipping industry in 2017-2018 look equally daunting, especially for the container sector. While there is likely to be some revival in container rates due to increased demand and the impacts of consolidation through merger and acquisition, and better alignment of capacity with demand in the main haul liner trades, new capacity expected to enter the market in 2017-2019 is likely to keep rates suppressed over the short to medium term. For example Xeneta, a rate benchmarking platform for containerised ocean, freight estimates that 78 new mega ships are due to enter the Asia-Europe trade in the next 2 years. The performance of the dry bulk trades also remain subdued. The longer-term position looks equally challenging for the container industry and other shipping sectors. While there has been an enhanced rate of scrapping of ageing and redundant capacity and a slowdown in orders for new ships, under utilised shipyards and the prospect of competitively priced new tonnage is likely to ensure that capacity will outstrip demand for those new vessels for the foreseeable future. The wider impact is, however, likely to be due to some more fundamental trends in the global economy. For the last decade, the spectacular growth in the Chinese economy has been the mainstay behind global GDP growth. The shipping industry has hugely benefited from this, and this growth is the main factor behind the substantial increase in containership capacity,


particularly investment in ultra large container ships over 18,000 TEUs. While the Chinese economy is holding up, mainly due to huge investment in infrastructure initiatives such as One Road and One Belt, OECD estimates GDP growth of 6-7 per cent in 2107 and 2018, rather than the 10-15 per cent relied on by the container ship operators to fi ll their mega container vessels. Moreover, as the Chinese economy and that of other developing countries mature, OECD analysis suggests that the shipping industry can no longer rely on the international trade multiplier eff ect many in the industry thought would return following recovery from the 2008 fi nancial crisis. Indeed, the OECD’s trade outlook projections forecast a convergence in GDP growth rates between advanced and emerging economies, and an overall downward trend in demand for container shipping services to 3.5 per cent per year in 2018 and beyond. OECD estimates that global GDP growth rates for both emerging and developing economies of circa 2 per cent by 2050. Container market restructuring The acute financial trading position described above, namely the decoupling of the historic international trade multiplier associated with demand for container shipping services and overinvestment in capacity, in particular investment in mega ships, have been major contributory factors behind the unprecedented restructuring of the industry. This restructuring has resulted in an acceleration of consolidation in the sector. For example, there have been more mergers and acquisitions (M & A) in the past 12 months than the last 12 years, and 8 of the top 20 container shipping groups have been acquired or forced into bankruptcy, including Hanjin Shipping. Industry analysts, including prominent industry leaders such as Soren Skou, CEO of AP Moller Maersk, predicts that further industry consolidation is inevitable and that only 5 or 6 container carriers will survive consolidation of the container sector through further M & A activity. Finch Ratings Agency estimates that the remaining top 5 or 6 container carriers will have a market share of around 57 per cent by 2018. To date, the main acquisitions have been Hapag Lloyd’s acquisitions of CSAV, the Chilean Latin American line and UASC, CMA-CGM’s purchase of NOL/APL, the Singapore-based carrier, the COSCO/China Shipping merger and their subsequent takeover of Orient Overseas International Lines (OOCL), Maersk Line’s acquisition of Hamburg Sud and the proposed merger of the 3 leading Japanese carriers NYK, MOL and K Line. From the container industry’s perspective, this shakeout is seen solely as a means of achieving market equilibrium, aiding financial recovery and in bridging the gap between supply and demand, the root cause of overcapacity through excessive shipbuilding.

Mega ships and Alliances In 2015, the OECD published two important reports: the ITF/OECD Report on Mega Ships and the OECD Competition Committee report on Competition Issues in Liner Shipping. The first report critically analysed the impact of mega ships. The report indicated that although shipping companies benefited from greater economies of scale and lower fuel costs, significant costs were borne by other parts of the supply chain including shippers, ports and terminals, and that these costs needed to be weighed against the cost benefits of mega ships. The OECD competition report made 3 important observations on alliances and mergers and acquisitions.


That competition agencies should take note over the exchange of information in the more elaborate map of cooperation agreements

Competition authorities and regulators should carefully scrutinise the impact of strategic alliances on competitive conditions, and strike the right balance between efficiencies they entail and their potential anti-competitive effects.

Merger control should take account of the impact of cooperative arrangements on competition conditions in the relevant trade lanes, avoiding a move towards excessive concentration and interdependency

Source: GSF 06th Annual Report

SRI LANKA CUSTOMS

The Council is pleased to announce that the dialogues with the Sri Lanka Customs continued, during the year under review. Concerns of the Importers and Exporters with regard to various policy matters and operational issues were brought to the attention of the Director General Customs and received positive responses to solve large number of operational issues during this period.

ENACTMENT OF NEW CUSTOMS ACT

Amendment to the Customs Ordinance to operate services at one combined

service counter in order to facilitate business activities

The proposal of Finance and Mass Media Minister Mangala Samaraweera to advice the Legal Draftsman to draft the proposed amendments to the Customs Ordinance, was approved by the Cabinet of Ministers. Sri Lanka’s Custom Ordinance, which was enacted in 1869, has been amended over time and is considered one of the oldest customs laws in the world. Finance Minister Mangala Samaraweera last year termed the Custom Ordinance “a complex and yet archaic law that has not kept up with the developments of modern global trade” and called for an overhaul of the same.

SRI LANKA CUSTOMS IS READY TO GO PAPERLESS

As part of the efforts moving towards a paperless environment in Sri Lanka Customs, UNCTAD has developed a new functionality in Asycuda World system to digitally sign the Customs Declarations in the import and export processes. As any other implementation performed by UNCTAD, this one is oriented to facilitate and speed up the import and export delay suppressing the cusdec printouts and improving one of the main security features, which is the user authentication.


Accordingly, Section 47 and 57 of the Customs Ordinance, the law governing the Customs, will be amended to enable facilitation of paperless trade and pre-arrival clearances

SRI LANKA PORTS AUTHORITY

During the course of 2016, SLSC has had very productive round table discussions with the SLPA to discuss various issues pertaining to the industry. Some of the issues highlighted were; shortage of equipment, shortage of space in warehouses, delays in de-stuffing of LCL cargo within 24 hours, request to link online payment with all banks, to clear Dangerous Cargo after 4.30 p.m.

Formulation of a National Policy for Shipping, Maritime and Logistics Sectors A Steering committee to formulate a National Policy for Shipping, Maritime and Logistics Sectors was set up under the guidance of Hon Minister of Ports & Shipping Mahinda Samarasinghe and Chairman Sri Lanka Ports Authority. The Council was invited to serve on the Steering Committee. At this first Steering Committee meeting held on 14.07.2017, the following 6 sub committees were formulated to draft the policy document.

1. Ports & Related Infrastructure. 2. Development of Maritime Related Services. 3. Developing a National Merchant Shipping Fleet(s). 4. Development of Logistics and Intermodal Infrastructure / Harmonization of the

Regulatory Framework. 5. Safety of life at sea, prevention of marine pollution, and maritime training. 6. Promotion of Small and Medium Scale Enterprises related to Maritime & Logistics

Sector. Chairman of SLSC served on two sub committees, Ports & Related Infrastructure headed by MD SLPA Development of Logistics and Intermodal Infrastructure / Harmonization of the Regulatory Framework headed by Mr. Romesh David. There were several sub – committee meetings to draft proposals to the steering committee and there was a workshop to fine tune sub-committee proposals with all stakeholders in the Steering committee. With the subcommittee findings, the task of formulating the final draft of Maritime and Logistics Policy document was entrusted to Mr. Ravi Galhena. After the sudden demise of Mr. Galhena, Dr. Dan Malik Gunasekera was appointed to undertake formulating the final draft. After much deliberation, the final draft for National Policy for Shipping, Maritime and Logistics Sectors was prepared and circulated amongst the Stakeholders for further comments. Document to be finalised within one month period.


VISIT TO BIA AIR CARGO TERMINAL AND SLAFFA CARGO SERVICES

Further to the comments made by the committee members highlighting the poor conditions, complicated procedures and the state of facilities at the Air Cargo terminal at BIA, a field visit was organised by the Council together with SLFFA with a view to experience fist hand its current state and readiness to take on future challenges on the 24th January 2018. Based in the observations, the following recommendations were forwarded to the Airport & Aviation Services (Sri Lanka) Ltd for their reference and necessary actions. Operation / Service Current State/ observations Recommendations

Cargo security check at Sri Lanka Air Force check point

1. Cartons unloaded to the ground for inspection which can cause damages or

accumulate dust in packaged goods.

2. No CCTV coverage thus unable to trace incidents if occurred to verified goods.

3. Absence of strict documental control for

security checked vehicles to enter airport.

1. Extend the check point roof to protect goods from bad weather and introduce a bay to unload

goods for inspection.

2. Possibility to introduce VACIS or Carton scanning machines at air force check point for x-

ray.

3. Introduce CCTV to monitor activities. 4. Introduce time stamped bar code controlled

security check passes.

Vehicle Entry Gate and Parking 1. Lengthy entry passes issuance procedure in place taking considerable time at the entry

gate.

2. Inadequate organized parking area to park trucks within the premises and the absence of

a parking allocation system.

1. Establish an on-line entry passes issuance system to reduce dwell time at the gate.

2. Demarcated truck parking area to be organized

within the premises and implement a system for automatic allocation of parking bays.

Air forwarder warehouses 1. Buildings are timeworn and unclean. 2. Unleveled docks.

3. Bird-infested area.

4. Limitations on expansions. 5. Double handling of cargo.

1. Possibility of removal of existing structures to give way for a purpose built state of the art multi

user facility.

2. Raise docks and introduce dock levelers for ease of cargo handling.

3. Introduce Pest control measures operational 365

days. 4. Introduce ‘building Airline cargo pallets’ at the

same facility to reduce double handling of goods.

Export Terminal 1. Insufficient space to stage shipments.

2. Unavailability of out of gage shipments

and airline pallet scanning machine. 3. Insufficient number of cargo scanning

machines causing delays and backlog.

4. Unavailability of separate scanning machines for transshipments.

5. Lack of proper procedure to obtain cargo

measurement. 6. Lack of adequate cold storage area

temperature controlled to maintain cold

chains. 7. Insufficient space and equipment within the

pallet build-up area to handle peak volume

days.

1. Possibility of expanding export terminal to

create more space for staging.

2. Possibility to extending facilities to build airline pallets at air forwarder warehouse within Cargo

village.

3. Introducing 1or 2 Pallet scanning machines. 4. Introducing additional cargo scanning machines

for transshipments.

5. Introduce a digital cargo measuring system. 6. Purpose built area to be used for temperature

controlled cold storage for local and

transshipment. 7. Possibility to expand the pallet build-up area

and have additional equipment available regularly.

SLLFFA and Import Terminal 1. Manual handling of import shipments.

2. Bird-infested area.

3. Lack of ventilation inside the building

given employees work long hours inside.

4. Potential scarcity of space for import shipments within terminal with planned

import/ export growth.

1. Introduce automation to efficiently warehouse

and issue import goods to consignees with a view

to optimize space within the terminal.

2. Introduce Pest control measures operational 365

days. 3. Introduce additional ventilation to the building.

4. Possibility of expanding import terminal to

create more space.

Vehicle exit gate 1. Absence of heightened exit security measures.

1. Check all vehicles leaving the premises irrespective of the entry reason for export

pilferage control and proper removal of import

shipments.

Shipment verification by Sri Lanka

Customs and BOI

1. Manual document control including

placing of seal for export release.

1. Process export clearance (paperless)

electronically without physical human

intervention.


Further to the meeting Sri Lanka Shippers’ Council and Sri Lanka Logistics and Freight

Forwarders’ Association (SLFFA) had with Airport & Aviation Services (AASL) on the 06th March

2018 to discuss the findings of previous visit to BIA AIR Cargo, a working committee has been

established by Chairman AASL to execute the recommendations made by the Council to

improve the services at Sri Lanka Air Cargo terminals in BIA.

IMO MANDATORY WEIGHING OF CONTAINERS BY SHIPPERS, FORWARDERS AND CONSOLIDATORS

World Bank research on VGM regulations in Sri Lanka

At the request made by Global Shippers’ Forum, the World Bank is keen to do a VGM project in Sri Lanka to identify extra charges that exporters have to pay due to IMO regulation on VGM.

TRADE FACILITATION INITIATIVES

WTO TRADE FACILITATION AGREEMENT

The establishment of a Trade Information Portal and National Single Window have been identified as the top priorities in the Trade Facilitation Implementation Plan of the NTFC. The establishment of the National Single Window is planned in two phases,

1. Blueprint development 2. Implementation Phase.

The blueprint will inform decision making by the Government of Sri Lanka (GoSL) on its goal of implementing the NSW, and final decisions on any changes in laws/regulations, policies or institutional arrangements/processes. Projects to develop and implement Trade Information Portal (TIP) and to develop the blueprint of the National Single Window has commenced with the technical assistance of the World Bank Group. The PM Group — an international consultancy firm hired by the World Bank Group is leading this project. These two project are being implemented under the direct leadership of the NTFC. Both projects are to be completed by July 2018. Implementation of NSW to be completed by year 2022. Department of Commerce is the lead agency for implementing TIP. The Council has involved in the above projects by participating public-private sector discussions organized by National Trade Facilitation Committee, International Trade Centre (ITC).


SRI LANKA NATIONAL EXPORT STRATEGY (NES)

The National Export Strategy (NES) has been developed by private and public stakeholders through extensive consultations which commenced from the First National Symposium held in April 2017 at Temple Trees, under the patronage of Prime Minister Ranil Wickremesinghe. During these consultations, a strategic vision for Sri Lanka’s export growth was developed: ‘Sri Lanka – An Export Hub driven by Innovation and Investment’.

Six priority sectors and four trade support functions (TSF) were identified by the private and public stakeholders at the consultations. These focus on diversification through support to the priority sectors which are ICT, Wellness Tourism, Spice Concentrates, Boat Building, Processed Food & Beverages, and Electronic, Electrical and Machinery.

All export sectors including the mature sectors will benefit from the strengthening of trade

support functions. These TSFs include National Quality Infrastructure, Innovation and R&D, Logistics and Trade Promotion. The NES for Sri Lanka is being designed by the Ministry of Development Strategies & International Trade and the Sri Lanka Export Development Board (EDB) in consultation with private and public stakeholders.

Technical Assistance to develop the NES is provided by the International Trade Centre (ITC) through funding by the European Union (EU), this technical assistance will aid Sri Lanka’s economic vision of strengthening the export competitiveness of the private sector to accomplish inclusive and sustainable growth.

The consultative process leads public sector institutions and private sector enterprises to design a common and agreed plan for growing and diversifying Sri Lanka’s export products and

reaching new target destinations. Moreover, the focus on some of these sectors will help to invigorate rural economies and create many new employment opportunities. This is part of the Sri Lankan Government’s drive to achieve a target of US $ 28 billion in exports revenue by 2020.

These priority sectors, chosen by the stakeholders, were selected on the basis that focus on these sectors may have the optimal desired impact on the Sri Lankan export economy. The Sri Lankan markets will benefit significantly from foreign investment and these sectors were

identified as having the greatest potential in the next five years to attract foreign investment. This has the potential to lead to setting up of international partnerships to benefit local markets and make the most of the current Free Trade Agreements already in place. In relation to each sector, one of the main objectives of the consultations was to seek answers to three questions; the Current status; Future goals; and, Steps or actions to reach the destination. Answers to

these questions are expected to help strengthen these sectors and contribute to innovative export led growth.

The second round of Consultative Meetings were held from 12-20 July, to define roadmaps for expanding exports and analyses performances of value chains for the NES focus sectors, market orientations, challenges and opportunities. The Trade Support Functions groups identified the main challenges in the provision of quality and affordable trade support services to Sri Lanka Exporters. Subsequently, regional and sector specific public and private stakeholder consultations were conducted, to confirm trade diagnostics, value chain performances, market


orientation and strategic issues, with the ultimate objective to design strategies to improve the industry performance.

Two rounds of sector consultations for each individual sector were conducted at the EDB, from 8 August to 8 September. Regional consultations were held in the Central, Northern and Southern Provinces from 18 to 22 September, to engage Regional Stakeholders and to ensure that regional concerns, requirements and specificities are fully integrated in strategic decision making.

The overview of the strategy design process and the reviewing and validation of the initial results were done at the 3rd consultation which took place from 10 to 12 October. Based on the NES vision and strategic objectives, a list of high priority export development interventions was identified for integration in the November 2018 National Budget.

Final NES document has been submitted to the parliament for cabinet approval. In the meantime, Advisory Committees were set up by the Hon. Minister, Malik Samarawickrema, Minister of Development Strategies and International Trade under the provision of the SLEDB’s Act No. 40 of 1979. These export “Advisory Committees” were rapidly reactivated for effective implementation and monitoring of the NES. These committees were set up for 3 year period. Council is a member of the Advisory Committee on Logistics.

The successful implementation of Sri Lanka’s National Export Strategy depends on the capacity

and willingness of all public and private sector stakeholders to contribute, collaborate, own and

drive towards a common national objective. Priorities need to be implemented at the earliest

possible opportunity and the frequency of regular and structured public-private dialogues will

be critical to maintain the momentum needed.

IDENTIFYING EXPORT POTENTIAL IN ENTREPOT TRADE

After many deliberations, a draft for Entrepot Trade Procedure was formulated by Sri Lanka

Export Development Board. The Council is a member of the committee.

ASIAN SHIPPERS’ ALLIANCE (ASA) /GLOBAL SHIPPERS’ ALLIANACE (GSA)

Chairman was invited to attend the Global Shippers’ Alliance (GSA) and Asian Shippers’ Alliance (ASA) Meetings in Hong Kong and Macau from 25 – 27 March 2018. This event was co-hosted by the Hong Kong Shippers’ Council (HKSC) and the Macau Shipper’s Association (MSA). Chairman attended the meeting as observer. Other participants at this meeting were representatives of the Shippers’ Councils from Indonesia, Bangladesh, Hong Kong, Thailand, and Macau.


In addition, GSA was represented by European Shippers’ Council (ESC) at this meeting togetyer with other European Shippers’ Councils. ASA is currently chaired by Mr. Toto Dirgantoro, Chairman of Indonesian Shippers’ Council and 2 Vice Chairs from Hong Kong and Bangladesh. Subsequent to this visit, GSA and ASA has extended an invitation to the Sri Lanka Shippers’ Council to become members of ASA and participate at future GSA’s meetings.

GLOBAL SHIPPERS’ FORUM (GSF)

GSF Annual meeting was held alongside the ICHCA (International Cargo Handling Co-ordination Association) International Conference, 65th anniversary meeting in Las Palmas, Gran Canaria Island on 1-3 October 2017. The GSF is a member of ICHCA, and through this arrangement the GSF represents shippers in the International Maritime Organization. Both organisations represent cargo interests and closely collaborated on GSF’s VGM compromise proposal in International Maritime Organization. (IMO)

EDUCATION & SEMINARS

SLSC- CINEC Scholarship program for Logistics and Trade Industry

Colombo International Nautical and Engineering College (CINEC) offered four scholarships to employees of SLSC membership who are involved in logistics, freight forwarding and supply chain to excel in higher education and enhance their career prospects on those fields. Scholarships on offered were as follows;

1) Professional Diploma In Freight Forwarding 2) Certificate in Logistics Services, Freight Forwarding and Multimodal Transport

(Course approved by Ministry of Ports, Highways and Shipping)

TRADE COMPLAINTS The Council continues to facilitate the trade by assisting in the mediation of trade disputes among the shipping lines, freight forwarders, NVOCC Operators, and shippers.

REPRESENTATIONS The Council continues to maintain its close association with the Government and Private sector organizations and also with the Trade Associations with a view to have a continued improvement on the required service levels. Some highlighted direct representations made during the year were as follows;


Representations at the Leadership of the Approved Associations meetings of the Ceylon Chamber of Commerce

National Agenda Committee on Logistics by the Ceylon Chamber of Commerce

Working group member of identifying Export Potential in Entrepot Trade Organised by Sri Lank Export Development Board

Working committee group chaired by Chairman, Airport & Aviation Services (Sri Lanka) Ltd to address airport cargo village issues

Formulation of National Export Strategy (NES) - Core team and working Group member

Advisory Committee on Logistics by Ministry of Development Strategies and International Trade to implement Plans of Actions (POAs) in NES.

Steering Committee - Formulation of a National Policy for Maritime and Logistics Sectors, Ministry of Ports & Shipping

THE CEYLON CHAMBER OF COMMERCE (CCC)

The Chairman of the Sri Lanka Shippers’ Council is a member of the Committee of the Ceylon Chamber of Commerce, the oldest Chamber in Sri Lanka with a history of over 178 years. The Council members have had several meetings with the Chamber officials on policy matters relating to port and shipping.

MEMBERSHIP The membership of the Council is open to all Trade Chambers and Associations engaged in Shipping and Port related activities as well as individual companies in the import/export trade. The membership committee is responsible for developing and increasing the membership of the Council. During the year under review, the Council approved membership for the following companies/organizations as Individual Members:

Industrial Clothing

FINANCE The Ceylon Chamber of Commerce manages the Council funds on behalf of the Council.

WEB SITE

www.shipperscouncil.lk Shippers’ Council website was revamped with a new outlook. The site is regularly updated with trade related information and hosts value added services.

http://www.shipperscouncil.lk/


SECRETARIAT The Ceylon Chamber of Commerce provides Secretarial services to the Council. The infrastructure of the Chamber is readily available to the Council.

BY THE ORDER OF THE COUNCIL

Sgd. Manori Dissanayaka

For Secretary

THE SECRETARIAT Sri Lanka Shippers' Council

C/o. The Ceylon Chamber of Commerce 50, Nawam Mawatha, Colombo 2

Direct Tel:+94 11 2392840, 5588871, 5588880

General Tel: +94 11 2421745-7, 5588800 Fax:+ 94 11 2449352, 2437477

E-mail: [email protected] Website: www.shipperscouncil.lk

tel:+94

mailto:[email protected]


SRI LANKA SHIPPERS’ COUNCIL

FINANCE STATEMENTS

FOR THE YEAR ENDED

31 MARCH 2018

annual report accounts...also a founder member of the association of shippers ouncils of angladesh,...

Documents