Sri Lanka’s Logistics Ambitions Stalled by New De-Consolidation Ban

Sri Lanka’s aspirations to become a logistics hub are facing a significant setback after customs authorities implemented a strict ban on the de-consolidation of goods. The practice, which involves breaking down large shipments into smaller parcels for individual delivery, had been a key driver of the island’s logistics activity. The ban, aimed at preventing under-declaration of imports, is now causing major bottlenecks and operational inefficiencies, leaving thousands of shipments stranded at customs warehouses.

The new policy requires that parcels be individually classified, a process that has led to significant backlogs and has been criticized by local business associations. They estimate that the country is losing millions of rupees each day due to the diversion of legitimate business away from the port. In a stark example of the impact, e-commerce platforms like AliExpress have already scaled back low-cost shipping options to Sri Lanka, leaving local consumers to face exorbitant delivery costs.

While supporters of the ban argue it is necessary to curb corruption and protect local industries from online competition, industry observers fear the move undermines Sri Lanka’s strategic geographical advantage. The logistical setbacks threaten both consumer confidence and the country’s long-term goal of positioning itself as a regional shipping hub. The government has appointed a committee to review the reforms, but for now, the future of the de-consolidation trade remains uncertain.

Source: https://lankanewsweb.net/archives/125886/sri-lankas-logistics-boom-stalled-de-consolidation-ban-bites/