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 SLPA to avert shipping sector slumps
 


Trincomalee Harbour

 

Sri Lanka is trying to position itself to attract the growing ship lay-up business triggered by the global economic slump and has earmarked safe anchorages for vessels, a senior Sri Lanka Ports Authority (SLPA) official said.

"The SLPA has received clearance from the security authorities to lay up vessels in safe anchorages outside Colombo harbour," said SLPA managing sources.

However, there have been several requests from shipping lines on the possibility of laying up their ships in our anchorages.

Trincomalee harbour being one of Asia's biggest natural harbours, used for ship lay-up during downturns in the shipping market before the outbreak of the ethnic war in the early 1980s. The SLPA is currently holding talks with the defence authorities on using the eastern port of Trincomalee for laying up ships. The worst hit by the downturn were container ships and bulk carriers with tankers also getting affected because of the lower oil market. Shipping industry officials said the country can earn fees for laying up vessels and also providing services to maintain the ships until they are recalled for service when the market recovers.

The demand for ship lay-up arose with the collapse in the shipping market caused partly by the global economic crisis which has reduced trade and partly by a huge over-supply of vessels. Shipping lines seek to lay up their vessels when it becomes uneconomic to operate them when the slump in the market hits earnings because of reduced demand, delivery of new vessels and fewer ships being scrapped. With charter rates plunging and earnings poor, loss-making shipping lines are scrambling to pull ships out of the market and lay them up until the market recovers. Some container lines have almost a quarter of their ship capacity in lay-up with the average figure being nine percent for the top 24 container lines. The situation is so bad that some newly built vessels are heading straight for lay-up. Countries such as Malaysia have been successful in promoting some of their anchorages for ship lay-up.
(DN-07052009)

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