It is reported that shipping agents in Sri Lanka have recently warned that due to the island nation's ongoing severe foreign exchange crisis, shipping lines are unable to remit freight charges, which may lead carriers to stop accepting import and export cargo to and from Sri Lanka.

Local agents informed Minister of Ports, Shipping and Aviation Nimal Siripala de Silva that, according to statistics, the amount of freight charges Sri Lanka has failed to remit to shipping lines over the past few months has reached as high as USD 70 million. The country has been grappling with a severe foreign exchange crisis, with its available foreign reserves dropping to less than USD 50 million in May.

This shows that Sri Lanka is facing its worst economic crisis since gaining independence in 1984.

Meanwhile, Sri Lanka's external debt stands at a staggering USD 51 billion! The amount due for repayment this year is as high as USD 7 billion. On May 19, Sri Lanka also experienced its first sovereign debt default since independence, which has severely damaged its international reputation and made it even harder to borrow the necessary funds from international markets.

Due to a shortage of foreign exchange, import bills are facing a severe crisis, and the prices of daily necessities have hit record highs.

The Ceylon Association of Shipping Agents (CASA), led by its Chairman, also raised this issue during discussions with the newly appointed Minister on key challenges facing the shipping industry.

She warned that as overdue freight charges mount, shipping lines may decide to withdraw their services from Sri Lankan ports. As a solution, she suggested that the Minister allow shipping lines to pay port charges in rupees until October.

Cash-strapped Sri Lanka has decided that, effective June 1, all payments to the Sri Lanka Ports Authority (SLPA) must be made in US dollars instead of the local currency, in order to replenish its foreign exchange reserves.

However, shipping agents pointed out that they cannot make all payments in dollars, as they receive several payments in rupees from shippers.

Meanwhile, the Port Authority has waived USD 20 million in demurrage charges for importers who were unable to clear their goods from the port on time due to delays in bank foreign exchange releases.

The foreign exchange crisis has left some importers unable to obtain foreign currency for weeks, preventing their cargo from being moved out of the port. This has led to extended storage time in the port yard, which in turn incurs demurrage charges.

To make matters worse, in some cases, the demurrage charges have even exceeded the value of the goods inside the container.

The President of Sri Lanka had requested the port authorities to waive demurrage charges to assist the country's import trade.

The Chairman of the Port Authority stated: "We have waived approximately USD 20 million in demurrage charges, which has been submitted for departmental approval."