By Murtaza Jafferjee, Chairperson, Advocata Institute. In context for a discussion with Sri Lanka's top exporters on the impact on COVID19 on Sri Lanka's exports.

1. Structure and direction
of Sri Lanka’s
merchandising exports
and shipping industry
A confidential
property of
Advocata Institute
Date

2. Merchandise exports
Merchandise exports are tangible goods, produced
by a country’s firms within a period of time and sold
abroad.
Sri Lanka’s merchandise exports for 2019 stood at
USD 11.9bn (0.4% YoY compared to 2018)

3. Major categories of merchandise
exports in 2019
• Textiles and garments – USD 5.6bn (46.9%)
• Tea – USD 1.3bn (11.3%)
• Rubber products – USD 890mn (7.5%)
• Petroleum products – USD 520mn (4.4%)

4. Where do they go?
• USA – USD 3.1bn
• UK – USD 980mn
• India – USD 777mn
• Germany – USD 614mn
Data for 2018
Source: CBSL, JB Securities
26%
16%
8%
13%
10%
7%
5%
15%

5. What did Sri Lanka export in
2017?
USD 19.7bn
Source: The Harvard Atlas of Economic Complexity

6. What were Sri Lanka’s
merchandise exports in 2017?
USD 11.9bn
Source: The Harvard Atlas of Economic Complexity

7. Where did Sri Lanka export
merchandise to?
USD 11.9bn
Source: The Harvard Atlas of Economic Complexity

8. What were Sri Lanka’s Textile
exports in 2017?
USD 5.4bn
Source: The Harvard Atlas of Economic Complexity

9. Where did Sri Lanka export
textiles to?
USD 5.4bn
Source: The Harvard Atlas of Economic Complexity

10. What were Sri Lanka’s textile
imports in 2017
USD 3.0bn
Source: The Harvard Atlas of Economic Complexity

11. Where did Sri Lanka import
textiles from?
USD 3.0bn
Source: The Harvard Atlas of Economic Complexity

12. What were Sri Lanka’s tea
exports in 2017?
Agriculture was USD 3.2bn of which tea was USD 1.5bn (45.4%)
Source: The Harvard Atlas of Economic Complexity

13. Where did Sri Lanka export tea
to?
USD 1.5bn
Source: The Harvard Atlas of Economic Complexity

14. What were Sri Lanka’s rubber
exports in 2017?
Chemical exports were USD 1.2bn of which rubber was USD 886mn (74.8%)
Source: The Harvard Atlas of Economic Complexity

15. Where did Sri Lanka export
rubber to?
USD 886mn
Source: The Harvard Atlas of Economic Complexity

16. What were Sri Lanka’s fish
exports in 2017
Agriculture exports were USD 3.2bn of which fish was approximately USD 272mn (8.5%)
Source: The Harvard Atlas of Economic Complexity

17. Where did Sri Lanka export the
fish to?
USD 272mn
Source: The Harvard Atlas of Economic Complexity

18. Textiles – 0.45%
Agriculture – 0.16%
Services – 0.15%
Stone – 0.05%
Chemicals – 0.05%
Vehicles – 0.02%
Machinery – 0.02%
Minerals – 0.02%
Electronics – 0.02%
Metals – 0.02%
What percentage of the world
market does Sri Lanka export?
Source: The Harvard Atlas of Economic Complexity
2017

19. Shipping and
Port Industry

20. Page 20
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Structure of International Seaborne Trade, 2018 Forecasted
Chemicals
2%
Gas
3%
Other Dry Cargo
7%
Containers
16%
Minor Dry Bulks
20%Oil
23%
Main Bulks
29%
Source: UNCTAD Review of Maritime Transport

21. Page 21
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International Seaborne Trade
Source: UNCTAD Review of Maritime Transport
35.0% 34.2% 33.3% 33.6% 33.0% 31.8% 30.9% 29.7% 28.7% 29.2% 29.7% 29.4%
22.2% 22.9% 23.6% 25.7%
26.9% 27.2%
28.2% 29.0% 30.4% 29.5%
29.6%
29.9%
28.5%
27.8% 27.6% 26.2%
24.8%
24.9%
25.1%
25.1%
24.5% 24.7%
23.9%
23.6%
14.2%
15.1%
15.5%
14.4%
15.4%
16.1%
15.9%
16.1%
16.5%
16.6%
16.9%
17.1%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million
Tonnes
Container
Other Dry Cargo
Three Major
Bulks
(Iron ore, Grain and
Coal)
Oil and Gas

22. Page 22
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Global container volumes growing slower after the GFC…
Market is Growing but at a much slower pace
249
279
315
363
399
443
497
525
478
548
596
625
645
678
696 710
753
0
100
200
300
400
500
600
700
800
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million
TEUs
CAGR
11.2%
CAGR 4.6%
Source: Drewry Maritime Research, UNCTADSTAT

23. Page 23
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Container trade routes, main and non-mainline trades.
Source: Dynamar, shipping 2020 by DNV, UNCTAD Review of Maritime
Transport
Trans-Pacific
45%
Asia-Europe
41%
Transatlanti
c…
Containerized trade on major East-
West routes - 2017
6.7%
4.0% 6.5%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Intra-Asian Non-mainline
East-West
North-South
Containerized trade on non-mainline
routes
YoY change

24. Page 24
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Proximity to the East-West Shipping Route
5.5 hours
1 hour
East-West Shipping Route
Source: JBS Research

25. Page 25
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Google earth image of the port
Source: Google Maps

26. Page 26
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0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(Jan
-Feb)
Colombo Port volumes ….CICT has catalyzed growth
Container
Throughput
(‘000 TEUs)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(Jan-Feb)
Total Volume 3,079 3,384 3,687 3,464 4,137 4,263 4,187 4,306 4,907 5,185 5,735 6,209 7,047 1,151
YOY Volume
Growth (%) 9.91 8.95 -6.05 19.43 3.03 -1.78 2.84 13.97 5.66 10.61 8.27 13.5
Source : Sri Lanka Ports Authority, CBSL
‘000
TEUs
YoY
4.4%
CAGR
7.1%

27. Page 27
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Source: SLPA Data
Transshipment volumes account for major volumes…
Transshipment Domestic
‘000
TEUs
0
1,000
2,000
3,000
4,000
5,000
6,000
2011 2012 2013 2014 2015 2016 2017 2018 2011 2012 2013 2014 2015 2016 2017 2018
CICT
SAG
T
SL
P…
SAGT
29%
CICT
38%
Market Share - Volume Wise
2018

28. Page 28
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Major Ports in India
Kandla
Port
Nhava
ShevaMumbai
Port
Mormugao Port
Mangalore Port
Kochi Port
Tuticorin
Port
Chennai Port
Visakhapatnam
Port
Paradip Port
Kolkata Port
(2,000 TEU,
0.02% )
(4,500,000 TEU,
53.28%)
(42,000 TEU, 0.50% )
(367,000 TEU, 4.35% )
(1,495,000 TEU,
17.70% )
(772,000 TEU, 9.14 % )
(95,000 TEU, 1.12% )
(642,000 TEU, 7.60% )
(30,000 TEU, 0.36% )
*(Container cargo handled in TEUs, container cargo handled as a percentage of total
)
(491,000 TEU, 5.81% )
Source: Indian Ports Association
(10,000 TEU, 0.12% )

29. Page 29
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Container Port Traffic – China vs. India
157.42
166.51
175.93
186.67
195.27 199.55
213.72
9.92 10.07 10.62 11.32 11.88 12.086 13.259
2011 2012 2013 2014 2015 2016 2017
China India
Million
TEUs
Source: World Bank

30. Page 30
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0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Evolution of Container Ships
Early Container Ship
(500-800TEU, 137*17*9m)
Fully Cellular
(1,000-2,500TEU, 215*20*10m)
Panamax
(3,000-3,400TEU,
250*32*12.5m)
Panamax Max
(3,400- 4,500TEU,
290*32*12.5m)
Post Panamax
(4,000-5,000TEU, 285*40*13m)
Post Panamax Plus
(6,000-8,000 TEU,
300*43*14.5m)
New Panamax
(12,500TEU, 366*49*15.2m)
Triple E
(18,000TEU, 400*59*15.5m)
*Category of the Ship
(Container Capacity Range,
Length*Width*Depth)

31. Page 31
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Categories of Container Ships
Class
TEU
Capacity
DWT
(average)
L (m) D (m) B (m)
1st Generation 750-1,100 14,000 180-200 9 27
2nd Generation
1,500-
1,800
30,000 225-240 11.5 30
3rd Generation
2,400-
3,000
45,000 275-300 12.5 32
4th Generation
4,000-
4,500
57,000 290-310 12.5 32.3
Post Panamax
4,300-
5,000
54,000 270-300 12 38-40
Super Post
Panamax or
Jumbo
6,000-
9,000
90,000 310-350 14 43
Ultra Large
Container Ships
14,000 157,000 400 15.5 56
Source: “Ports and Terminals” by H. Ligteringen, H. Velsink

32. Page 32
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Challenges for Ports due to Ultra Large Vessels
• Increasing cargo volumes at ports will require ports to invest in more infrastructure.
• Number of ships that can be handled at the quay decreases due to the higher length of the vessels.
• Big ships require at least 4,000 moves per hour to be economical.
Increased gantry crane outreach is
required for larger ships
Require improved
productivity (berth moves
per hour)Berth depth has
increased
Source: Drewry Maritime Research

33. Page 33
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Economies of mega ships…
• The ship-cost decreases as the ship size increases, same time the shore-cost increases due to factors such as
need for deeper draft ports, faster cargo handling, etc.
• However there is an optimal ship size that must be decided by finding a compromise between Shore-cost and
Ship-cost.
• At this point the least total transportation cost/tonne of cargo is achieved.
Dis-economies of
scale
Dis-economiesofscale
Cost per TEU
Ship Size
Ship Related Cost
Land Sided Cost
Total Cost
Source :https://www.linkedin.com/pulse/trend-towards-bigger-ships-slow-steaming-hrishikesh-
chatterjee

34. Page 34
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Shipping Alliances
Shipping line Alliances/vessel sharing agreements (VSAs)
Maersk
P3 (denied)
2M
MSC
CMA CGM
Ocean ThreeChina Shipping
China Shipping/UASC
UASC
NYK
Grand Alliance
G6 Alliance
OOCL
Hapag‐Lloyd
APL
New World AllianceMOL
Hyundai
Cosco
CKYH Alliance
CKYHE Alliance
K Line
Yang Ming
Hanjin
Evergreen Independent
Source: Drewry Maritime Research

35. Page 35
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Percentage of Main Liners to India is increasing…
Year Main Liners Feeders
1990 10 90
2000 20 80
2005 30 70
2015 35 65

36. Structure of
discussion

37. Session 1 – Current Status Quo
• Nature of product and end user demand, e.g. consumer staple, discretionary
product, frequency of purchase, is it a complementary product consumed with
other products, functionality, intermediate or end use product, etc.
• The distribution system that is used to sell the product, e.g. the number of
intermediaries, brick and mortar, ecommerce
• What has happened to demand ? Is the lack of income or lack of access to
the product. Have consumers shifted to substitutes or cheaper brands ?
• Explain the nature of your supply chain ? Do you have challenges in getting
your inputs ? If so, what are they ? Do your suppliers have similar challenges
or different ones ?
• What is the status of your domestic operations ? what is the status of your
foreign operations ?
• Are you experiencing delays in receiving payments for goods that you have
already shipped ?

38. Session 2 – How do you see the
recovery
• What is your forecast for the recovery ? How will demand respond ?
How will supply respond ?
• Will there be a new normal for your industry ? Will there be
consolidation ? Is there a shift in the business model, e.g.
ecommerce gaining greater traction?
• How are you hoping to exploit the new normal ?
• What are the new opportunities for Sri Lanka from this crisis ?
• In what way can the government help ?

39. Q&A

40. Thank you

41. Page 42
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Berth productivity issues
Berth productivity is a combination of crane speed and crane
intensity
Ship turnaround time is driven by:
• Individual crane cycle speeds
• Crane intensity across the ship
However, currently it’s hard to increase the average number of
cranes deployed directly in line with ship size because ship lengths
are not increasing :
Ship size
(TEU)
Length (m) Width (m) Max draft
(m)
Boxes wide
12,000 365-380 48-50 15.5 19-20
15,000 400 56 16 22
18,000 400 59 16 23
20-25,000 440-450? 59-61? 16.5? 23-24?
Source: Drewry Maritime Research

42. Page 43
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Terminal wise Facilities in the Colombo Port
Facility JCT SAGT CICT
Alongside depth (meters) 12-15 15 18
Berth Length (Main and Feeder meters) 1,642 940 1,200
Feeder Berths 02
Container Berths 04 03 04
Quayside Container Cranes (Panamax and Super Post
Panamax)
20 12 12
Rail mounted Gantry Cranes 04
Rubber tired Container Transfer Cranes 59 31 40
Terminal tractors and trailers 210 70 72
Top Lifters 24
Container Stacking Capacity (TEU) 55,538
Source: Sri Lanka Ports Authority, SAGT, CICT

43. Thank you