Sri Lanka Bleeding Over $50 Million in Foreign Exchange Annually Through Colombo Port Charges, Industry Warns

Sri Lanka's logistics sector has sounded the alarm over a significant foreign exchange haemorrhage, warning that the country may be losing more than US$50 million every year due to the current regulatory framework governing port-related charges at the Port of Colombo.

Industry Body Raises Urgent Concerns

The Ceylon Freight and Logistics Forwarders Association (CEYFFA) has formally flagged the issue, highlighting that the existing regulations allow charges imposed on importers and exporters at the Port of Colombo to be bundled into freight costs — a practice the association argues is causing a substantial and largely unnoticed drain on the country's precious foreign currency reserves.

At a time when Sri Lanka is still navigating its way through a painful economic recovery following the 2022 foreign exchange crisis, the warning carries particular weight. The country has worked hard to rebuild its reserves, making any systemic leakage of foreign exchange a matter of serious national concern.

The Core of the Problem

According to CEYFFA, the crux of the issue lies in how port charges are currently structured and regulated. When these charges are included within freight payments, they are effectively processed outside of transparent local payment mechanisms, resulting in foreign currency flowing out of Sri Lanka rather than being retained or transacted domestically.

The association has argued that this regulatory loophole, while perhaps overlooked in calmer economic times, represents a structural flaw that must be urgently addressed by the relevant authorities.

Call for Regulatory Reform

CEYFFA is urging policymakers and regulatory bodies to revisit the existing framework and introduce reforms that would ensure port-related charges are handled in a manner that prevents unnecessary foreign exchange outflows. The association believes that with the right policy interventions, a significant portion of this annual loss could be recovered and retained within the Sri Lankan financial system.

For a nation that imports heavily and relies on a busy transshipment hub in Colombo, the cumulative impact of such leakage year after year poses a considerable challenge to long-term economic stability.

Broader Implications for Trade

Sri Lanka's Port of Colombo is one of South Asia's busiest and most strategically important ports, handling millions of containers annually. Its role as a regional transshipment hub makes the integrity of its financial and regulatory framework critical — not only for local traders but also for international shipping lines and logistics operators who use Colombo as a key node in their supply chains.

Industry observers note that unless this issue is addressed promptly, it could also undermine Sri Lanka's competitiveness as a logistics hub, as traders and operators factor regulatory inefficiencies into their overall cost calculations.

CEYFFA has indicated it is engaging with relevant government bodies and regulators to find a workable solution, stressing that timely action is essential to stem what it describes as an avoidable and damaging loss of foreign exchange for the Sri Lankan economy.