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Apparel trade boosts South Asia transshipment business

Apparel exports from South Asia have grown by around 10 per cent annually from 2005 to 2014, with Sri Lanka alone setting a sales target for the industry of $8 billion by 2020. The IMF expects GDP growth for India, Pakistan, Sri Lanka and Bangladesh between 2015 and 2020 to be well above the world average, with India leading the way at around 8 per cent.

Ports in the region in 2015 handled just under 22 million 20-foot-equivalent units, similar to the east coast of North America. Meanwhile, 2015 throughput grew by 234,000 TEUs in India, 278,000 TEUs in Sri Lanka, 274,000s TEU in Pakistan and 324,000 TEUs in Bangladesh.

Part of the reason for the upswing in South Asia container handling is a greater trend towards transshipment and leading the way in this is Sri Lanka’s evolution as a regional hub.

Analysts opined lagging port infrastructure in the region for many years meant that container lines preferred to base their hub and spoke networks in the Middle East and Southeast Asia, but the development of the port of Colombo as a viable hub following the end of the civil war in 2009 has boosted the South Asia TEU count. The Sri Lankan hub’s growth was tapered by the continuous upsizing of vessels with deeper draft requirements, but the opening of the Colombo International Container Terminal at the new South Harbour in 2013 with 20-meter (66-foot) access channel, has kick-started further activity.