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Damage shuts-down Colombo and Madras cargo-handling facilities

LOS ANGELES - 12/28/04 - The worst earthquake to strike Southeast Asia in more than 40 years has left more than 65,000 dead and billions of dollars in property damage, with the resulting tsunami closing several of the busiest deep-water ports in one of the world's busiest regional economies.
 
The Port of Colombo, Sri Lanka was shut down indefinitely yesterday because of extensive damage to its container facilities and headquarters building.

The port - one of the busiest transshipment ports in all of Asia - has handled a record 2 million TEU's (20-foot equivalent units) through the end of last month, a growth surge of almost 14% over the same period last year.

Colombo's two main container terminals - the Queen Elizabeth Quay and Jaya Container Terminal - are being expanded, but projections that operations at both facilities would boost that figure to total more of than 2.2 million containers by the end of the year have been dashed because of the tsunami damage.

To the east, the port of Madras was closed yesterday by the tsunami - which was triggered by the quake that struck off the Indonesian island of Sumatra - with conflicting evaluations of the damage to the port's facilities ranging from minimal" to "considerable."  

In any case, problems are expected with export shipments - particularly transshipments - moving out of southeast India destined for points throughout the US and Europe.

Usually, transshipment cargo is consolidated at Singapore, Dubai, or Colombo since larger ships are often routed to avoid direct calls at Indian ports to avoid cargo-handling delays.

Cargo destined for Thailand and Malaysia would face delays since relief shipments would get priority, according to several freight forwarders interviewed by The Times of India, while "the same situation would prevail in the case of Colombo and the Maldives too," they said.
 
The "silver lining" is that there is no problem with the southern Indian ports except Madras, also known as Chennai, with Tuticorin, Vizag, Kolkata, and Kakinada ports reporting normal operations.

Madras, which sits on India's southeastern seaboard, serves as a key logistics hub for the export of a range of goods from cars and electronics to coffee and spices moving to points throughout North America, Europe, and Latin America.

South Korean car giant Hyundai Motor Co. has a large plant on the outskirts of Madras which produces small cars for shipment to Africa, North America, and Western Europe, while Ford Motor Co. also has a plant near the port city.

In Malaysia, Port Klang and Tanjung Pelepas have reported no interruption to their services as both ports were not in the range of the tidal waves.

According to industry sources, Tanjung Pelepas - or PTP - is expected to maintain its position as Malaysia's busiest container terminal, beating out Port Klang.

The port is expected to handle a record throughput of over 4 million TEUs by the end of the year - a goal that could well be met as some regional cargo is likely to be diverted from Colombo in the short to medium-term.   

That goal would amount to a 15% increase over last year's throughput of 3.49 million TEUs.
 
In comparison, Port Klang's two terminals, Northport and Westport, are projected to handle 2.7 million TEUs and 2.6 million TEUs respectively by the end of 2004.
 
Although primarily a regional transhipment port, PTP's intra-Asian cargo volumes have also shown very positive increases with an expected 25% rise in local boxes handled.
 
While the overall, long-term impact of the disaster can't be ascertained, economists familiar with the development of Asia's burgeoning economy are speculating that the impact on the region's trade with the US will be, at worst, marginal.
 
Clifford Waldman, an economist at Manufacturers Alliance/MAPI, a research group, told the Associated Press, "I don't see any major impact on US manufacturers" as the countries most affected by the disaster aren't huge markets for US-made goods.
 
Waldman also didn't expect major supply disruptions to US companies. But, he said, there's the possibility of "transportation bottlenecks and uncertainties with orders and shipping," he said.

Carriers currently linking the affected region with the ports of Los Angeles, Long Beach, and Oakland include APL, Hanjin Shipping, Mitsui OSK, Evergreen, Orient Overseas Container Line (OOCL), Maersk Sealand, China Ocean Shipping Co. (COSCO), Mediterranean Shipping, P&ONedlloyd, "K" Line, and NYK.

According to the latest US Department of Commerce figures, Sri Lanka - heaviest hit by the disaster - exported $1.6 billion in goods and services to the US in 2003, while it bought just $133.5 million in US-made goods and services during the year.

The country is a big exporter of textiles and apparel to the US, the European Union, and other countries.

US exports to India during the same period came to nearly $5 billion last year, while imports from the subcontinent totaled $13.1 billion.

India exports textiles, consumer products, computers and electronics, and gems and jewelry, among other goods to the US.

Indonesia bought US products valued at nearly $2.2 billion with its sales to US customers valued at $9.2 billion. Indonesia's exports include oil, natural gas, and electrical appliances.

Malaysia bought $8.9 billion worth of US goods and services in 2003, while it exported $23.3 billion worth of electronic equipment, petroleum, and liquefied natural gas to the US.

US exports to Thailand amounted to more than $5.2 billion with the country selling $14.3 billion in computers, transistors and seafood to US buyers. 

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