Dec 04, Colombo: In a move to reduce the cost of shipping and attract more shipping lines to Sri Lanka's ports, Sri Lanka in its 2014 Budget has abolished the terminal handling charges (THCs) and other surcharges levied by the container lines from next year.
From January 2014, Sri Lankan shippers will pay an all-in freight rate, President Mahinda Rajapaksa announced in his recent budget speech to parliament.
"In order to prevent the monopoly of pricing in the shipping trade, no shipping line will be permitted to levy terminal handling and other charges in addition to freight and specified international charges for containerized cargo. Relevant prohibition will be made effective through amendments to the finance act, effective January 2014," the 2014 Budget stated.
The move is a victory for the Sri Lankan Shippers' Council (SLSC), which has lobbied for the abolition of THCs since late 90's.
Sri Lanka first introduced THC in 1994 on import cargo and before that THC was included in the freight. Sri Lanka charges the highest THCs in the Asia region.
The SLSC says the THC has made Sri Lanka's exports uncompetitive and has cost the country Rs. 4.4 billion on Imports & Exports and consumers Rs. 2.5 billion.