Insight – Sri Lanka’s strategic position in the global trade route
From elephants and spices to gems and timber, Sri Lanka has played a
pivotal role in the East to West trade route for hundreds of years. Today,
Sri Lanka is at the crossroads of the fastest-growing economies in the
world and is the main transhipment port in South Asia, presenting
opportunities for both Australian exporters and logistics services
Sri Lanka’s strategic advantages
Sri Lanka’s two major ports are the Port of Colombo and the Port of
Hambantota in the south, both of which are well connected to Colombo
Airport. In 2018, the Port of Colombo alone handled seven million TEU
containers, up from one million in 1995.
As a major maritime hub in the region, Sri Lanka offers:
a strategic position in South Asia that provides
access to the emerging economic giant India. India is on track to be
the third largest economy in the world by 2030, after China and the US.
exposure to China’s Belt and Road Initiative through
terminals in the Port of Colombo and the Port of Hambantota, both of
which have attracted Chinese investment. China is one of Sri Lanka’s
key trading partners.
the ability to reach Europe and the Middle East faster
with the capacity to accommodate post panmax or triple ‘E’ class
Competitive advantages for Australian exporters
Australian businesses that export or are considering exporting to Sri Lanka
can use its ports to ship products to other markets. Australian
agricultural, food and clothing companies also have the option of shipping
raw materials to Sri Lanka for processing or manufacturing, then exporting
the finished goods to markets around the world.
Shipping out of Sri Lanka offers the following benefits:
Faster speed to market
– Sri Lanka provides unparalleled speed, frequency and capacity for
exporters that want to ship products to Europe’s major ports, including
Rotterdam, Antwerp, Felixstow, Southampton and Hamburg. Meanwhile, the
Port of New York can be reached within 22 days. Dubai and Singapore –
the major ports either side of Colombo – can be reached in 4.5 days
through multiple carriers. Sri Lanka is highly suited for
time-sensitive cargo such as garments and value-added food products.
Preferential market access
– Sri Lanka has free trade agreements with India and Pakistan, and is
concluding agreements with Singapore and China. It has preferential
access to EU markets under the GSP + scheme. Agricultural produce such
as grains and lentils can be processed in Sri Lankan free zones for
export to neighbouring markets.
Greater choice and capacity
– Freight capacity and frequency out of the Port of Colombo is
unmatched when compared with other ports in South Asia. A Sri
Lankan–based exporter can choose from multiple mainline carriers, which
means multiple container cut-off times to ship goods direct to main
ports. An exporter based in South India has fewer options and will need
to rely on feeder vessels with capacity constraints.
Lower freight and logistics
– With scale comes lower shipping and logistics costs. Exporting out of
the Port of Colombo can minimise the cost of price-sensitive cargo such
as agricultural commodities, minerals and construction materials.
Opportunities for logistics service providers
Australian logistics providers based in Sri Lanka can offer their services
to South Asian and other international customers plugged into global supply
There are opportunities to provide services such as multi-country
consolidations (MCC), entrepot services, warehousing, assembly and minor
processing, labelling and repackaging. Companies that offer diving
services, ship repairs, bunkering, ship chandlers, sea marshals and crew
may also find opportunities at Sri Lankan ports.
The Sri Lankan Government is supporting all of the above opportunities
National Export Strategy – Logistics Strategy 2018–2022
Contact Austrade for more
information if you wish to expand your logistics footprint in Sri Lanka or
intend to make use of Sri Lanka’s position as a springboard to enter new