By: Staff Writer
August 02, Colombo (LNW): Sri Lanka’s foreign joint venture industries in free trade zones nationwide are severely impacted by bureaucratic red tape and corruption, causing intentional delays and deficiencies in shipping and customs clearance operations, according to complaints from FTZ manufacturers.
The Free Trade Zone Manufacturers Association (FTZMA) recently highlighted the concerns of BOI enterprises over significant delays and inefficiencies in shipping and customs processes.
This renewed concern persists despite previous discussions with Customs Additional Director General – Revenue and Services, Seevali Arukgoda.
“We continue to face customs-related delays, exacerbating the operational challenges already posed by the maritime industry’s lack of space and containers,” FTZMA Chairman Dhammika Fernando and Secretary Tyronne Weckasinghe wrote to Arukgoda.
They also sent copies of the letter to BOI Chairman Dinesh Weerakkody and Ceylon Chamber of Commerce Chairman Duminda Hulangamuwa.
Manufacturers have observed consistent delays in clearing Less than Container Load (LCL) cargo from port warehouses, extending to at least two weeks from the de-stuffing day. There is also a significant delay in the de-stuffing process after the import containers arrive.
Despite the end of the Sri Lanka Customs trade union action, importers are still experiencing undue delays of 10 to 14 days in clearing goods due to customs backlogs caused by capacity constraints and a lack of workforce.
Customs are conducting 100% physical inspections on imported cargo without recognizing the importer’s legitimacy through the Authorized Economic Operator (AEO) system, disregarding whether imports are raw materials for BOI enterprises or other merchandise for domestic consumption.
Transport rates are being haphazardly increased by truckers and trucking companies due to ongoing port delays. Exporters are struggling to obtain containers for exports because of prolonged delays in import cargo clearance, leading to a container scarcity.
The port congestion is causing shipping lines to roll over or reject export cargo bookings, disrupting the flow of goods and creating bottlenecks.
This hindrance in product movement from suppliers to end customers erodes customer trust and damages brand reputation, causing businesses to lose out to competitors. Additionally, ocean freight rates have drastically increased, adding an extra $4,000 to $5,000 per TEU.
The majority of officers at both Customs and the Sri Lanka Ports Authority (SLPA) are seen as lethargic and resistant to change, often displaying a rude and dismissive attitude. This behavior is considered a disgrace to the nation. While changing attitudes is challenging, it is achievable over time. The issues outlined are disrupting the supply chain flow, causing bottlenecks, and hindering product movement from suppliers to customers.
Therefore, the FTZMA earnestly requests that these concerns be addressed promptly to mitigate further disruptions and financial burdens faced by stakeholders due to increased storage costs and tied-up working capital.
