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Should shipping agencies be liberalized?

21 August 2017 10:13 am - 0     - {{hitsCtrl.values.hits}}

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 As the centre of the Indian Ocean, Sri Lanka has a long history involved in both East and West Shipping trade lanes.


It is a well-known fact in the trade that few individuals are benefitting by having many shipping agencies with them.


In order to prevent cartelization, anti-competitive behaviour and monopoly happening within the trade it would be wise for the government to look at this possibility, the monopoly behaviour of such a shipping entity would be dangerous to the government of Sri Lanka as it can control the freight rates and pressurize the Sri Lanka Ports Authority to reduce tariff rates in order to benefit their interest.
Cartelisation and anti-competitive behaviour is already seen in the industry and this is not limited to shipping it is also have expanded to the freight forwarding industry. Cartelisation is disadvantages to the Sri Lankan exporter as they do not enjoy the best possible and competitive freight rates in the industry for their exports and exporters would agree that the need for competition is vital.

 


Invitation for investments
By liberalising the shipping trade in Sri Lanka we invite big container lines to invest in this country creating more jobs and making it a logistic hub in the Indian ocean, it is no secret that many European shipping lines were looking at this possibility in the past and have been shot down by their agents in Sri Lanka.


The need for an anti-competitive council or regulatory authority to monitor monopoly behaviour in shipping is a must in order to see this industry to not fall in to the hands of individuals or companies with hidden agendas.


Liberalizing the shipping trade will also help the Sri Lankan exporter obtain competitive and fair freight rates for their exports as this promotes competitiveness among the shipping lines in order to secure cargo for their individual company.


It is also the question that if FMC (Federal Maritime Commission) of USA, anti-competitive authority in the European Union, Monopoly and Competition councils and authorities are monitoring this situation elsewhere in this trade, why is it not done in 
Sri Lanka?


Is it to protect people with hidden agendas or to not give the Sri Lanka exporter the true benefit of shipping their goods out of Sri Lanka?

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