The recent push by few intermediaries possibly backed by a handful of powerful oligopolistic firms who control the shipping and logistics industry in Sri Lanka to reinstate separate Terminal Handling Charges (THC) in Sri Lanka is an anti-competitive manoeuvre that threatens the hard-earned transparency of the country’s maritime logistics industry established for years by consecutive Governments. Industry bodies that represent exporters, importers and consumers have rightfully condemned lobbying efforts aimed at reintroducing these deceptive, unbundled costs to make profits. The current legal framework-which does not ban any charge but only provides provisions not to separate collection of any other charges than a full freight from a contracting party. This must be fiercely upheld to safeguard Sri Lankan exporters, importers, and consumers from predatory, cartel-like pricing models which can affect external customers of Sri Lanka.
Few days back
It was just two weeks back we reported the Federal Maritime Commission Chairperson Laura Debella highlighting the importance of these actions that not only affects the Sri Lankan economy but at the end of the day from the origin to the U.S. importers and consumers who source from Sri Lanka or export to Sri Lanka where anti-competitive and monopolistic behaviour can harm fair trade practices. She called for strong enforcement against -monopolistic structures.
A legacy of transparency and fair play
Before the historic regulatory shift in 2014, local shipping agents’/ service providers heavily distorted trade costs by slapping local traders with a web of nearly 40 arbitrary surcharges at their will. Recognising this as an unfair financial extraction, the Sri Lankan Government implemented a landmark legislative reform banning container line agents and service providers from unbundling freight and levying separate charges including a so-called THC locally. Under current law, terminal handling costs must be wrapped into all-inclusive freight rates contractually agreed upon by the primary contracting parties.
This progressive policy did not abolish port fees; rather, it mandated that they be paid transparently by the shipping lines directly to the Sri Lanka Ports Authority (SLPA or its terminals) under existing market contracts.
Dismantling the reinstatement myth
Intermediary groups often mask their lobbying behind the claim that banning local THC collection harms the competitiveness of the Port of Colombo. This is a gross misrepresentation.
Double-Dipping charges: No terminal services are being rendered for free. Shipping lines already collect all-inclusive rates that cover terminal operations. Forcing local exporters to pay a separate THC would amount to double-dipping by maritime intermediaries.
Invented line items: The term ‘Terminal Handling Charge’ does not even exist within the official SLPA tariff and a port where liner terms clearly describe who pays what to the port services. It is a phrase coined by certain logistics groups to avoid the word stevedoring to create a local pipeline for collecting unregulated fees from non-contracting parties.
Undermining export competitiveness and harming the cost of living: Reintroducing unbundled charges would artificially inflate the cost structure of key industries, such as the exporters, intermediary product manufacturers, consumer products, food items, construction industry to all imported items at a time when macroeconomic stability is vital.
Protecting a competitive economy
Reverting to the pre-2014 chaos would be an economic step backward. The local business community and regulatory bodies must stand united against these ‘backdoor fees’. Ensuring that all costs remain bundled into all-inclusive freight rates is the only way to lock in fairness, preserve absolute market competition and transparency, and defend Sri Lanka’s efforts and to build a reputation as a top-tier maritime hub.