Matarbari Is Gearing Up. Sri Lanka Must Turn Maritime Competition into Economic Opportunity

South Asia’s maritime economy is entering a new phase. As trade expands, manufacturing shifts, supply chains diversify and demand for imported energy, raw materials and consumer goods grows, countries across the region are investing in ports capable of accommodating larger ships, moving cargo more efficiently and reducing the cost of international trade. Bangladesh’s proposed Matarbari Deep-Sea Port is part of this transformation. For Sri Lanka, whose Port of Colombo has established itself as a leading container transhipment hub, Colombo can remain commercially competitive while building new opportunities with its neighbours too. The emergence of Matarbari, alongside India’s Vizhinjam International Seaport in Kerala, underlines a wider regional reality: countries are seeking greater control over their trade logistics, fewer costly handling stages and stronger links to international shipping networks.\

It is said that modern container ships can carry more than 20,000 twenty-foot equivalent units (TEUs), allowing shipping companies to move larger volumes in fewer voyages. When a port has sufficient water depth, suitable berths, powerful cranes and efficient cargo-handling systems, it can accommodate larger vessels and potentially reduce the cost per container. Besides that, a port also needs sufficient cargo demand, efficient operations, competitive charges, reliable schedules and good connections to inland markets and feeder services.

Colombo already possesses several of these advantages. According to the Sri Lanka Ports Authority (SLPA), the Port of Colombo handled 8,291,178 TEUs in 2025, up from 7,792,069 TEUs in 2024. That was a record performance and reinforced Colombo’s position as South Asia’s leading container hub. Its established connections to major east-west shipping routes, existing transshipment network and deep-water terminal facilities give it a considerable commercial advantage. Colombo International Container Terminals (CICT), for example, reports berth depths of 18 metres and an access channel depth of 20 metres, with facilities designed to handle vessels exceeding 22,000 TEUs.

The contrast with Bangladesh is that, the Chattogram port, the country’s principal seaport, handled approximately 3.41 million TEUs during calendar year 2025, according to figures reported by the Chittagong Port Authority. Colombo therefore handled roughly 2.4 times Chattogram’s annual container throughput. The comparison is not exact in every operational respect, and the figures represent different national port systems.

Bangladesh, however, has a legitimate economic reason to develop Matarbari. Its growing export industries, particularly ready-made garments, depend on dependable access to overseas markets. Its import requirements include energy, machinery, industrial inputs and other essential commodities. As trade volumes rise, port congestion, vessel restrictions and additional handling costs can affect exporters’ competitiveness. A deep-sea facility could allow larger vessels to call closer to Bangladesh’s markets, reducing dependence on intermediate ports for some cargo movements.

The Matarbari project has been planned around deep-water access and the handling of larger vessels. Japan has played a major role through the Japan International Cooperation Agency (JICA), while construction contracts have been awarded for key port infrastructure. The initial development includes a container and multipurpose jetty, dredging, a reclaimed container yard and associated facilities. Earlier JICA planning documents specified a channel and turning basin designed around vessels of approximately 8,000-8,200 TEUs, although the eventual operating capacity will depend on the completed design and implementation. Commercial operations have been targeted for around 2029, according to reported project schedules.

Some Bangladeshi containers that currently travel through Colombo for transhipment may eventually move through Matarbari instead, which can be obvious. Yet such a shift does not mean that Bangladesh’s new port will automatically displace Colombo. The two ports serve different commercial functions, and the most economical route will depend on where cargo originates, where it is destined, the shipping line’s network, vessel size, port charges and total transit time.

If Sri Lanka becomes complacent about turnaround times, congestion, labour productivity, digital documentation or operating costs, shipping lines will have incentives to consider alternatives. India’s Vizhinjam port also deserves attention because it is being developed as a deep-water transshipment hub closer to major international shipping routes. Competition is therefore on the rise.

The appropriate response is to compete while cooperating. Sri Lanka and Bangladesh should begin with a detailed commercial assessment of cargo flows between the two countries. There was some request from Bangladesh to give immediate attention to their cargo and the shipment to be released sooner without being held with the congestion Sri Lanka port faces from time to time.

The SLPA and relevant Bangladeshi port authorities should identify how much Bangladesh-related cargo Colombo currently handles, how much is transhipped, which destinations are involved and which services could remain commercially viable after Matarbari opens.

The next step should be stronger shipping connections. Colombo and Matarbari could explore direct services, feeder links or coordinated schedules where cargo volumes justify them. Such arrangements must be based on demand and sound commercial calculations, not diplomatic symbolism. Shipping companies should be involved from the beginning to determine whether a route can attract sufficient cargo and operate profitably.

Sri Lanka should also widen its maritime ambitions beyond container transhipment. Warehousing, cargo consolidation, freight forwarding, shipping agencies, marine services, bunkering, logistics technology and regional distribution can create additional revenue and employment. Better links between ports, industrial zones, exporters and inland transport networks would allow both countries to capture more value from growing trade. Cooperation on digital cargo documentation, tracking and customs procedures could also reduce delays and administrative costs.

At the same time, Colombo must continue investing in appropriate capacity, port digitalisation and efficient terminal operations. New terminals and breakwaters should be assessed against credible cargo forecasts, financing costs and long-term returns. Building infrastructure without sufficient demand can burden public finances; failing to invest where demand exists can surrender business to competitors. Economic discipline must guide both decisions.

South Asia’s growing maritime trade should not be treated as a contest in which one country’s development necessarily means another’s decline. Bangladesh needs a port system capable of supporting its expanding economy. Sri Lanka needs to preserve its transhipment advantage and develop a broader logistics sector. Both objectives can coexist if the region’s ports become more efficient, connected and commercially responsive.

Perhaps Matarbari will give Colombo time to prepare before the new port reaches full commercial operation. The port of Colombo, from time to time, undergoes serious crises. The recent cancellation of the proposed international logistics centre involving China under a build-operate-transfer (BOT) agreement was epic. It was a bad consideration altogether.  Then came the shelving of the earlier arrangement involving India and Japan for the development of the Eastern Container Terminal. Such reversals are negative signals for the port business, undermining investor confidence and raising concerns about Sri Lanka’s policy consistency and commitment to long-term port development.

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The writer is an award-winning journalist and Deputy Editor at The Morning, Sri Lanka