Sri Lanka aims to become a knowledge, commercial, aviation, and energy hub in Asia. Logistics play an indispensable role in achieving these goals. Sri Lanka has a strategic geographic location but scores moderately on logistics performance. The document analyzes Sri Lanka's logistics performance indicators, infrastructure, customs efficiency, and shipping scenario. It finds the largest improvements are needed in logistics quality and competence. The way forward includes establishing a separate statutory body for logistics and improving infrastructure, border management integration, and private sector collaboration. Modernizing systems and reducing barriers can help Sri Lanka better utilize its advantages and location.

1. Cross-border Logistics Performance
in Sri Lanka: the way forward
LalithEdirisinghe

2. BACKGROUND
According to the Mahinda Chintanaya Idiri
Dekma the country has a clear and definite
objective of converting the country to a
Naval
Aviation
Commercial
Energy and
Knowledge hub in Asia

3. LOGISTICS PLAY AN INDISPENSIBLE ROLE IN THE NAVAL, COMMERCIAL AND
AVIATION HUBS

4. • Being an island, the sea creates a barrier for
certain modes of transport for movement of
incoming and outgoing cargo to Sri Lanka such
as land based transportation, while placing it
in a highly strategic position for Sea transport
• The north of the country faces one of the
economic tigers of the world today with an
increasing disposable income, India.
BACKGROUND contd.

5. SRI LANKA’S GEOSTRATEGIC LOCATION
5
Located at the center of sub
continents
Air Connectivity
17 Feeder points in the
region that make SL a
transhipment hub.
Sea port Connectivity

6. THE LOGISTICS SCENARIO
• Logistics Performance Indicators (LPI) of Sri
Lanka (SL) is 81 out of 155 countries in 2012
• Investors essentially demand top level
performance in Logistics
• Competing countries like Singapore tops in
the ranking
• Rapid and consistent improvements in LPI is a
prerequisite for 3 Hubs

7. RESEARCH QUESTIONS
1. What are the reasons for moderate level of
Logistics performance despite country
specific advantages ?
2. What are the improvements required in
policy regulations in Sri Lanka (SL)?

8. HYPOTHESES
1. Modern systems, and infrastructure facilities
effect the Logistics industry in SL
2. The link between customs and other border
management agencies in SL impact the
effectiveness and efficiency in logistics
3. Appointing a separate statutory body to
administer the logistics industry influence
logistics perfrmance in SL

9. METHODOLOGY
• The research has utilized both qualitative and
quantitative data from primary and secondary
sources.
• Opinion Survey
• Primary data were collected through
unstructured interviews with officials of Sri
Lanka Ports Authority, Board of Investment of
SL, and SL Customs.
• To make clarifications and get opinion on
latest changes of policies, procedures
implementation of new projects etc.

10. • Secondary data by reviewing
• Doing Business Reports of the World Bank,
• Maritime Transport Reports of United Nations
Conference on Trade and Development,
• The Global Competitiveness Reports of World
Economic Forum
• The Connecting to Compete Reports of The World
Bank
• The annual publications of the Central Bank and
various logistics related trade associations in Sri
Lanka.
METHODOLOGY (Cont…)

11. Literature review
• The dominant maritime position of Sri Lanka was seen
gradually eroding over the years, particularly since the latter
half of the 20th
century. Colombo has gradually lost its
attraction for marine traffic (Ratnayake and Wijeratne, 2012)
• Improving logistics performance has become an important
development policy objective in recent years because logistics
have a major impact on economic activity.(World Bank, 2012)
• Indexes see the potential in Sri Lanka to establish itself as a
hub in the areas of naval, aviation and commercial activities.
(Edirisinghe & Muller, 2013)

12. COMPARISON OF GLOBAL
TRANSPORT MODES

13. LOGISTICS PERFORMANCE INDEX
(LPI)
LPI is based on recent theoretical and empirical research and on the practical
experience of logistics professionals involved in international freight
forwarding.
LPI analyzes countries in six components
1. The efficiency of customs and border management
clearance
2. The quality of trade and transport infrastructure
3. The ease of arranging competitively priced shipments
4. The competence and quality of logistics services
5. The ability to track and trace consignments
6. The frequency with which shipments reach
consignees within scheduled or expected delivery
times

14. Conceptual Model of LPI
The LPI of the World Bank was used as a tool to
analyse the cross border logistics performance
in SL

15. COMPARISON OF LPI
COMPONENTS IN SRI LANKA
Indicator Improvement
in ranking
2012 2010 2010 vs 2012
Logistics Performance Indicator
(LPI)
81 137 56
Infrastructure 89 138 49
Logistics Quality and Competence 68 142 74
Customs 71 143 72
International Shipments 50 117 67
Tracking and Tracing 86 142 56
Timeliness 110 125 15
Rank (out of 155 countries)
Connecting to Compete 2010-2012.: The International Bank for Reconstruction and Development/The World Bank.

16. • The highest improvement (+74) is recorded in the
‘Logistics Quality and Competence’ (Transportation, Clearing
&Freight Forwarding)
• Customs (+72)
• Customs is not the whole of border management
• It refers to delays and unexpected problems in quality and
standards inspection agencies, and in health and sanitary
and phytosanitary agencies.
• Sri Lanka has reduced the time to export by implementing
the ASYCUDA World electronic data interchange system
COMPARISON OF LPI
COMPONENTS IN SRI LANKA

17. SL INDICATORS IN DOING
BUSINESS ACROSS BORDERS
Year 2007 2013
No. Of countries in the survey 175 185
Trading Across Borders 99 56
Documents to export (number) 8 6
Time to export (days) 25 20
Cost to export (US$ per container) 797 720
Documents to import (number) 13 6
Time to import (days) 27 19
Cost to import (US$ per container) 789 775
Doing Business 2007-2013. International Bank for Reconstruction and Development / The World Bank

18. • International shipments (+67)
– Ease of arranging competitively priced shipments.
• Tracking & Tracing(+56)
– Ability to track and trace consignments.
• Timeliness(+15)
– Frequency with which shipments reach the
consignee within the scheduled or expected time.
COMPARISON OF LPI
COMPONENTS IN SRI LANKA

19. INFRASTRUCTURE INDICATORS
Indicator Rank
2010-11 2011-12 2012-13
No of countries considered 139 142 144
Quality of overall infrastructure 61 48 50
Quality of roads 55 49 48
Quality of railroad infrastructure 40 37 37
Quality of port infrastructure 44 45 45
Quality of air transport infrastructure 62 60 56
Available airline seat kms/week, millions 64 59 56
The Global Competitiveness Report 2010–2013: World Economic Forum

20. THE IMPACT OF SHIPPING
• Container ships arrival to port of Colombo was
80 percent in 2012
• Transhipment container traffic is the major
contributor to SL logistics performance
• Shipping is a
derived
demand of the
international
trade

21. THE SHIPPING SCENARIO IN SRI
LANKA

22. CONCERNS IN SHIPPING
• SL’s export volume is only 35 percent of external
trade compared to 65 percent of imports against
the total laden movements
• 28 percent of domestic containers handled are
empty containers
• This does not generate any income to shipping
lines but creates a substantial cost.
• It is estimated that approximately USD 80 million
is spent every year on empty container
repositions.

23. CONCLUSIONS
• From a development perspective, converting the
country into naval, aviation and commercial hubs
is pertinent to the cross border movement of
goods, services and people.
• While using the advantages of the strategic
geographical location Sri Lanka can learn from
countries such as South Africa which has made
great progress in making trading across borders
easy, efficient and effective.

24. CONCLUSIONS (CONT…)
• Lower LPI is mainly attributed to
• The absence of dry port facility
• Port users are not innovative enough in reaping the
real potential of Hambantota port
• Usage of rail road for cargo movement is at negligible
level
• On-line booking systems are not utilized by all
stakeholders.
• Inconsistency in operational productivity in the supply
chain
• Issues related to feeder network availability to cover
all destinations/origins

25. THE WAY FORWARD
1. Although, policymaking is a responsibility
shared among respective government
agencies, SL should take a lead in
transforming a separate statuary body for
logistics
2. The present trend of investment in improving
the logistics infrastructure should be
continued but a close evaluation with respect
to return on investment is required.

26. 3. Border management agencies should develop
a holistic approach with customs to reduce
the burden of multiple barriers at borders
4. Extensive us of electronic submission and
processing of documents
5. SL Customs should focus on to the Strategic
Risk Management, Compliance Management
and Change Management
THE WAY FORWARD (CONT..)

27. 6. Congested road access to the Colombo Port and the
poor quality of trucking and rail services should be
eased
7. A collective Logistics framework that includes the
private sector is important for consistent
implementation
8. More research in Logistics and supply chain should
be carried out by universities that permeate and
proliferate to the power of decision making for the
betterment of the industry
THE WAY FORWARD (CONT..)

28. Thank you