Shipping agents continue lobbying at highest levels

Sri Lanka’s leading shipping agents headed by two conglomerates continue to lobby at the highest level in government against the 2018 budget proposal to liberalise shipping services, top level official sources revealed to the Business Times.

They were scheduled to make their representations to the president to protect their interests in the shipping industry, these sources said.

A team of representatives of shipping agents met Finance Minister Mangala Samaraweera recently and urged him to withdraw the budget proposal of removing foreign ownership restrictions in shipping agencies, a senior Treasury official said.

But Minister Samaraweera has rejected their appeal as the aim of the budget proposal was to lay the foundation to achieve a maritime hub status for the island, he disclosed.

Few shipping agency houses are being benefitted as they are controlling many shipping agencies under their belt, he said.

Mr. Samaraweera noted that the government has taken this decision to prevent cartelisation, anti- competitive behaviour and monopoly happening within the trade at present.

The monopolistic power of a few shipping agency houses could control the freight rates and put pressure to reduce tariff rates for their benefit, he added.

These companies are in a position to fix freight rates to the exporters of Sri Lanka and prevent competition, he pointed out.

Competition and fair practice of shipping activities in the industry will benefit the Sri Lankan exporter to obtain competitive and fair freight rates, these source said adding that the competition is vital among all shipping lines in order to secure cargo for their individual shipping company.

Expressing his views on this matter, Minister of Ports and Shipping Mahinda Samarasinghe pointed out that international mega shipping companies will not immediately set up their offices in the country investing massive sums of money.

A senior official noted that at present Sri Lankan shipping companies are getting 5 per cent commission with the opening of the business to foreign companies the country would be able to earn a massive sum of much needed foreign exchange.