Sri Lanka’s logistics sector needs major transformations and sweeping regulatory reforms, to attract large-scale foreign direct investment, to become a stronger contributor towards the country’s economic growth, Shippers’ Academy International Founder Rohan Masakorala said on Ada Derana’s The Nightly Business Report programme on Friday (21).

Masakorala said: “Sri Lanka needs to do major reforms in the shipping sector to be very competitive. We are still a transhipment port and are not considered a maritime centre of the world. We need to attract foreign direct investment into the country in a big way, which needs a lot of legal reforms, for investors to feel comfortable, to do business operations in a more efficient and a transparent manner.”

“Sri Lanka’s ports are currently benefitting due to the disruptions linked to the Strait of Hormuz, where Colombo and Hambantota ports handle diverted cargo and vehicle movements. However, this current advantage is very limited and a short-term opportunity,” he said.

“Therefore, towards long-term expansion, to turn the short-term windfall into a lasting economic opportunity, Sri Lanka, while attracting foreign investment, must overhaul its legal, regulatory and business systems to move beyond its role as a transshipment hub and establish itself as a competitive global maritime centre,” Masakorala stated.

According to the Sri Lanka Export Development Board (EDB), the logistics sector contributes approximately 2.5% to GDP, accounting for around 7% of total national exports. The sector supports regional transshipment, entrepot trade and multi-modal supply chain solutions.

The industry provides full-time direct employment to 40,000–50,000 people. Currently, there are 130 shipping agencies and 120 freight forwarders in associations while more than 500 companies registered with the Merchant Shipping Secretariat (MSS), including clearing agents, according to EDB, as a means to handle high-value cargo systems.

He further said: “All the necessary ecosystems have to be built by the country. Just having a location won't help us to become a maritime sector, which has been proven beyond doubt, because our current systems have been around for nearly four decades now.”