Mr. Dinesh Sri Chandrasekara Chairman, SLFFA

(Speech from the 40th SLFFA AGM of Sri Lanka Logistics & Freight Forwarders Association held on 25th September 2021)

Members of the head table, my fellow executive committee members, members and distinguished invitees,

I am honoured to have been granted the opportunity to serve as the 20th chairman of the Sri Lanka Logistics and Freight Forwarders Association, for the coming year. I am truly grateful for the trust placed in me and am mindful of the challenges ahead, in these unprecedented times. Together, with the support of my executive committee and also you, my fellow members, I will do my best to build on our strong leadership foundation and steer our association forward, against all odds. It’s heartening to see the new faces taking up responsibilities in this year’s executive committee. They are all well-accomplished professionals and leaders in their respective domains, but fresh in taking up SLFFA duties. I hope that all members will give their sincere support to our team, to do what we ought to do, boldly, passionately and with integrity

Let me also take this opportunity to congratulate our outgoing president, Roshan Silva and his executive committee for a job well done… Their committed service to our association will inspire our path ahead. I have learnt a great deal whilst working closely with our outgoing chairman, who was not afraid to take on challenges and tread on an unbeaten track, with great confidence... Thank you Roshan for your unwavering leadership and in taking SLFFA to greater heights.

The lifestyle changes and uncertainties thrown our way by the pandemic have brought logistics and freight forwarding to the forefront. Many of the activities that we undertook silently for over decades have suddenly taken centre stage and we as logisticians stand tall amidst quarantine curfews and lockdowns. Our members have worked tirelessly without giving excuses to keep the dynamics of trade alive. Those from our trade were among the first to adapt to the new world order have continued to proactively meet changing demands. It in indeed a fitting tribute to have the government dedicate the 16th of August as the National Logistics Day and having inaugurated it during these times makes it all the more special.

As you will all agree, our industry is at a critical juncture. These are indeed volatile times. The first quarter of the last financial year, was the worst-hit, with business at its lowest. Come second and third quarters, business volumes improved; yet, imbalances within the shipping industry continued, leading to significant mismatches in demand and supply of capacity, and record-high freight costs. Working capital constraints are weighing down on our industry and the present foreign exchange crisis is further impeding business prospects.

The liquidity crunches across all industries spill over to freight forwarders and though this problem has been in existence for a while, at present it looms darker than ever before. In order to mitigate the risks to which freight forwarders are exposed and to provide clear information on the creditworthiness of those we deal with, SLFFA is currently working with a software developer to modernise our debtor database. Once completed and launched, which would hopefully take place within the next two to three months, this system will allow our members to manage their credit exposures effectively. I should note that we are also planning to collaborate with the CRIB in this regard and the first round of talks was held a few months ago

Amidst evolving challenges in this decade, continuous knowledge sharing, education, training and capacity building, are of utmost importance to any industry. The success of our industry is strongly linked with the quality of our own teams. AITT, our education arm, has a pivotal role to play in this regard. We should also focus on attracting companies outside the SLFFA membership as well as foreign students from neighbouring countries like Maldives and Bangladesh. Discussions are currently underway with the relevant authorities to obtain the required approval to carry out these programmes for international students.

Now is the time, to really focus on our nation’s hub aspirations. But so far, no meaningful measures have been taken despite the enthusiasm. We have what it takes to make Sri Lanka a world-class hub next to Singapore and Dubai. SLFFA, along with other stakeholders can make this a reality; we should work together with our experts, industry specialists , academics and successful entrepreneurs, to create a ‘think-tank’ and formulate a roadmap to reach the hub status. Let us call upon the government along with all relevant stakeholders to come on board. If we stay complacent and continue to dilly-dally, we will most likely lose out to our neighbours, irrespective of our strategic location. The urgency is very real, given the upcoming South Indian ports. It is actually now or never…

As per the World Bank Logistics Performance Index, Sri Lanka is ranked 94th out of 160 countries. This is despite the Port of Colombo ranking 23rd amongst the busiest ports and 15th amongst the best-connected ports in the World. Countries which are poorly connected and even land locked have better rankings. Our logistics industry is well-ahead of our regional competitors, with many of our companies doing exceptionally well. Such a low ranking is actually baffling; you will agree that we surely deserve better. As an association, it is imperative that we rally all stakeholders and lobby—try to influence focus groups—the opinion makers, who give their feedback to the worldwide logistics survey. We have to take our fair place on the Index. It’s simply a matter of changing their perception.

Alongside these efforts, we must also continue to pursue the single window platform, to connect all agencies online and in real-time. As all of you know, we have gone down this path before, on many occasions, since 1996. Yet, such a platform has never materialised. In fact, this is our industry’s biggest roadblock, bringing down our level of efficiency and burdening our transactional costs. With COVID-19 rampant, this is an ideal time to take this up with the relevant authorities, trusting that they will heed our call. This is not just for our industry, but also for the sake of our economy. The timing is just right…. Let us request the government to draw up clear policies to give life to this much needed platform. We are also banking on the forthcoming project, DIGITISING GLOBAL MARITIME TRADE, under the auspices of UNCTAD and the German alliance for trade facilitation, also known as GIZ. As you may know, Sri Lanka and Cambodia are selected for the pilot projects, with discussions already underway with key stakeholders. SLFFA is keen to play its part in this initiative. We will do our utmost to push this forward.

As for our commercial arm, SLFFA Cargo Services; its success story has been phenomenal. The import terminal at the BIA has been operating for over 25 years, extending an exceptional service to members and importers alike. The standards maintained have benefited the industry, even influencing its competitor. I take this opportunity to call upon you, our members, to channel all your freight to SLFFA Cargo Services.

On the ocean freight front, it is high time that SLFFA Cargo Services ventured into setting up an off-port facility—to enable MCC operations, import LCL and transhipment facilitation. It is about time, that the authorities also give us a green light for this operation. The Company has been mooting this idea for the past 15 years or so, yet red-tape has always stood in the way. We in the industry are enthusiastic and fervently hope to see the current initiative take-off, with speedy approvals and support from the Sri Lanka Customs and the Ports Authority.

Moving to e-freight, specifically on E air way bill project , our association has also been collaborating with CCN for over a decade. The cost has been significant, almost over 20 million rupees. finally, this is gaining traction with the Civil Aviation Authority setting a deadline . The ground reality is that some Airlines are still reluctant to comply with this directive. On one hand, everyone is more than willing to sing praise of digitalisation and paperless transactions, but when the opportunity is presented to them, some are not willing to move forward... what an irony… and more so, short-sightedness. We cannot sit on the fence, watch and wait for the airlines to act. We must lobby with Sri Lankan Airlines, as the ground handling agent, to strictly enforce this directive.

SLFFA Cargo Services is currently evaluating a bonded transport facility, between Mattala Airport and the BIA as well as the Port of Colombo. This is timely, after all, Mattala Airport is being developed to be a hub for cargo. The first mover advantage will be our ace and we trust that the authorities will support us in this endeavour.

Our industry’s future lies in our hands…We must not forget that our industry growth was modest, if not flat, when comparing statistics from 2017 to 2019, with 2020 being even lower than that. Historically freight forwarders have found much of their revenue through imports and exports; however, the time is now ripe for us to look at alternatives. Using the domain knowledge that we possess and the specialist skills that we have, we should be able to offer more creative solutions to our customers through innovation, technology, value added services and B to C offerings, to name a few. Out of the box thinking has to be the way forward rather than under cutting on price and leveraging on credit in a limited market place.

Ladies and gentlemen, this year, we mark our 40th anniversary. Looking back, there is much to celebrate. We, as the apex body of our industry, have truly made a difference, raising the bar every step of the way. Our feats over the years stand as our testimony. Today, with the spotlight on the industry, amidst a new normal, we have stood our ground to get the job done. Yet, complacency is not our hallmark. As I take on my duties as the new chair, I see great opportunities for greater triumphs…

After all, the past is to be remembered. The present is to be experienced and the future of our industry, is ours to be crafted.

I would have loved to end this session by inviting you all to fellowship. But in these unusual times, we cannot mix and mingle as we have been doing in the past. But the thought is very much there, and that’s what counts. In brighter days to come, let us meet up, connect, have fun and most importantly, work on our friendships…. Hope is surely on our side.