Sri Lanka needs a resilient logistics system- WB

CEYLON TODAY | Published: 2:00 AM Apr 29 2021

A national logistics system that is efficient and resilient is more important now than ever, as this sector provides the backbone for a functioning economy, World Bank (WB) Sri Lanka , Senior Transport Specialist , Winnie Wang stated in latest WB blog post.

According to her, solutions such as digitalisation, improved transport connectivity, multimodal transport operations, and better coordination between various stakeholders will go a long way in strengthening domestic supply chains and maximising the benefits that the Port of Colombo and others can bring to the country.

The WB has recently completed a study covering all aspects of Sri Lanka’s logistics sector, with recommendations for the way forward, she stated.

“COVID-19 had underscored how fragmented Sri Lanka’s domestic supply chains were, leading to inefficiencies throughout the logistics sector and it also underscored how fragmented Sri Lanka’s domestic supply chains were –particularly those related to agricultural products – leading to inefficiencies throughout the logistics sector,” she stated.

“Initially, online delivery systems also crashed as the country had very limited experience with digital platforms and paperless transactions. However, they picked up quickly, and small and medium enterprises were quick to utilise Social Media and Smartphone apps to deliver goods to customers”.

Even so, the pandemic brought the fundamental challenges that confront Sri Lanka’s transportation network into stark relief. The vital sinews, which keep the island nation’s freight and cargo moving, were unduly dependent on road transport. Around 97 per cent of the country’s domestic freight is transported by road – with half the trucks returning empty – causing unnecessary congestion in the road network and increasing transportation costs. 

The pandemic also highlighted the inadequacies in the warehousing infrastructure. According to the National Export Strategy (NES), only 138 customs-bonded warehouses exist throughout Sri Lanka, with around 80 per cent of them located in the Western Province.

Besides, cold storage facilities are insufficient for storing fisheries products, a key commodity, and no major facilities exist for the safe storage of perishables at important locations. This shortfall is likely to hinder the country’s planned expansion of agricultural exports.

At the broader level, Sri Lanka’s exports, particularly the key export commodities such as tea and garments, have been significantly impacted by the pandemic. For example, according to Sri Lanka Export Development Board data, garment exports recorded an 82 per cent decline, falling from USD 333 million in April 2019 to just USD 58 million in April 2020. 

In a recent survey by the Ceylon Chamber of Commerce, 63 per cent of Sri Lanka’s firms exporting goods and services reported significant disruption in their overall business operations due to COVID-19. 

The Government of Sri Lanka is taking action to improve the country’s logistics system.  In addition to providing financial support and adopting many other initiatives, digitalisation has been recognised as a key priority to improve the efficiency of the logistics sector and ensure contactless transactions for long-term sustainability. For instance, a few years ago, the blueprint for a National Single Window system was prepared jointly with the Government of Sri Lanka to facilitate efficient and paperless trade.

The private industry is also taking initiatives to improve the efficiency of the country’s logistics sector. In 2019, a private firm launched the Smart Truck Initiative via the SyTrans platform, making it easier for industry to book and schedule trucks through a mobile app. The initiative can yield even greater benefits if scaled up nationwide.

CEYLON TODAY | Published: 2:00 AM Apr 29 2021

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