The National Chamber of Exporters of Sri Lanka (NCE) has called for the existing all-inclusive freight framework to be upheld, warning that the reintroduction of separate Terminal Handling Charges (THC) could increase shipping costs for exporters and importers, with the additional expenses eventually passed on to consumers.

A Terminal Handling Charge is a fee associated with handling a shipping container at a port, including moving it on and off a vessel. Under Sri Lanka’s existing framework, these costs must be incorporated into a single all-inclusive freight rate agreed between the shipping line and the party contracting for the service. A separate THC charged over and above that agreed rate would reintroduce an additional layer of charges.

The all-inclusive freight framework was established under Gazette No. 1842/16 in December 2013 and strengthened in 2017 under Gazette No. 2041/10, requiring container costs to be included in a single freight rate payable by the party contracting with the shipping line.

In October 2022, the Ministry of Shipping issued a Gazette introducing new tariffs at the request of local service providers. Several stakeholders challenged the move in the Supreme Court, which ruled that the then Minister had exceeded his authority and that rescinding the Gazette required a two-thirds majority in Parliament. The Ministry subsequently amended the Gazette and rescinded the 2017 protection, but following public pressure, the rule was restored under Gazette No. 2334/26, dated 31 March 2023, which remains in force.

The repeated attempts to change the framework have raised concerns about a return to the fragmented charging system that existed before 2013. At the time, importers and exporters faced nearly 50 separate charges, many of which varied and were imposed on parties with little say in how they were determined. Separate THC on imports alone rose from US$ 55 in 1995 to US$ 155 per ton today.

The Sri Lanka Ports Authority’s own tariff does not use the term “Terminal Handling Charge”. It specifies that a vessel’s stevedoring costs must be paid directly by the shipping line to the port. These costs must be incorporated into the all-inclusive freight payment rather than passed on to exporters and importers as a separate charge.

The all-inclusive framework does not prevent service providers from collecting legitimate payments. It requires those costs to be covered within the agreed freight arrangement, allowing the contracting parties to negotiate the terms of the service without separate local surcharges being imposed outside that arrangement.

The NCE calls for Gazette No. 2334/26 to be upheld and for the existing framework not to be amended or rescinded. Transparent freight pricing is important to exporters and importers, while also helping limit the additional costs that can pass through supply chains and affect the prices paid by consumers.