Colombo, September 2025 – SLFFA Cargo Services Limited (SLFFACSL), a unique consortium business model comprising 61 leading freight forwarders established 31 years ago, reported strong financial and operational performance at its 31st Annual General Meeting, despite industry and economic challenges.
Delivering his review, Chairman D. R. Hallock expressed pride in the company’s resilience and achievements over three decades, noting that the past year marked another significant milestone. He continued…
“PERFORMANCE
The year under review has been encouraging for SLFFA Cargo Services Ltd (SLFFACSL) due to various factors which have been explained in this report. The substantial increase in volumes during the year have been due to the continuing upward trend from the preceding year.
Our shareholders have accounted for 69% of the cargo while other members of Sri Lanka Logistics & Freight Forwarders Association (SLFFA) brought in 27% and 4% from non-SLFFA members. Going forward, SLFFACSL will require continued support from members of SLFFA, particularly as our feedback from customers is that SLFFACSL provides an efficient, speedy and personalized service. Towards this goal, SLFFACSL tariff is designed to compete effectively with Sri Lankan Cargo.
The total turnover of the Company had increased substantially by 49% from Rs. 356.12 M in the previous year to Rs.531.51M this year. The Gross Profit of the Company has increased substantially by 39% from Rs.183.92M in the previous year to Rs.254.94 M this year. During the period under review, a substantial part of cargo handled once again, has been general cargo followed by fabrics and accessories for the garment industry.
The Administration and Establishment costs were Rs.172.08 M and the Rent expenses have increased by 24% this year, representing 26%. However, the Company was able to minimize the cost escalation with a determined effort by all staff, coupled with a cost-cutting drive.
The Company has succeeded in maintaining maximum efficiency levels in spite of lean management measures undertaken. The staff turnaround for the year has increased to 45%, compared with 40% in the previous year. The turnaround was particularly from junior out-sourced staff categories of Cargo Assistant and Loader. The main factor for the high staff turnover this year has been due to the difficulties in coping with the instability in the country, nature of work involved and related issues. We have continued to take measures to improve HR practices with regular on-the-job training and staff promotions based on merit, loyalty and efficiency.
HUMAN RESOURCES
The Company has succeeded in maintaining maximum efficiency levels in spite of lean management measures undertaken. The staff turnaround for the year has increased to 45%, compared with 40% in the previous year. The turnaround was particularly from out-sourced staff of Cargo Assistants and Loader categories. The main reason for the staff turnover this year has been due to the difficulties in coping with the instability in the country and related issues. We have continued to take measures to improve HR practices with regular on-the-job training and staff promotions based on merit, loyalty and efficiency.
The introduction of new staff with no experience was managed with continuous in-house training of the staff in basic cargo handling skills to ensure compliance with the SLFFACS Operations Manual. The training sessions conducted in Fire-Fighting skills and First-Aid were provided by AASL. Participation in other training courses and the annual year-end staff get-together were curtailed due to the prevailing unstable economic conditions.
DIVIDENDS
An interim dividend of 0.25 cents Gross amounting to Rs.7.1 million was declared and paid. The Board of Directors have decided on a final dividend payment of Rs. 1.75 per share.
FUTURE PROSPECTS
The Board of Directors continue to engage with the authorities concerned for handling of import groupage consolidated sea cargo, including transshipment as well as multi-country consolidation cargo within and outside the Port. Towards this end, the Board of Directors are continuing to work on plans to operate a fully-fledged Cargo Handling Terminal (CHT), although there have been a few drawbacks faced in this regard. This facility is expected to enhance the throughput of inbound and outbound logistics of ocean cargo in Sri Lanka. While accruing many benefits to the importers and exporters in the country, it is expected to enhance significantly the international competitiveness of local exports and enhance our country’s position as a regional distribution and logistics hub.
The quality of services provided to inbound de-consolidators in respect LCL/FCL groupage and MCC/transshipment services continued to be a huge challenge. Further the cost impact on de-consolidators appears to have increased with cost recovery mechanism being strongly resisted by the trade. Consequently, the need for SLFFACSL to commence the project referred to above has been heightened. The Board of Directors of SLFFACSL are mindful of this and are doing everything possible to positively respond to this industry’s need.
Satisfactory progress has been made in its partnership with CCN Singapore with regard to offering Cargo Community Systems (CCS) services to the air cargo community in Sri Lanka. Currently, this industry initiative has progressed well, with over 40 leading Freight Forwarders, 12 leading Airlines and 6 GSAs successfully executing E-AWBs via CCNhub. SLFFACSL would like to encourage a determined effort by all stakeholders of the industry to move towards automation in a paper-less environment, whilst CCN is the only service provider currently in the market, offering its reliable services through SLFFACSL in Sri Lanka.
SLFFACSL in conjunction with its strategic partner CCN Singapore are pleased to record that the new Government took steps to immediately cancel a hastily granted approval to some shadowy entity to implement the Air cargo Community System for Air cargo. SLFFACSL are however keen to see the fruition of the Air cargo Community System soon as a private sector initiative and look forward to working closely with all concerned stakeholders to ensure implementation at the earliest. In this context he observed that the correct structured approach being finally taken by GOSL for implementation of Trade National Single Window System(TNSWS) and was of the view that the aircargo community system could fit into this initiative.
SLFFACSL welcomes the steps taken by the new Government to stave off hasty & shortsighted privatisation of Sri Lankan Airlines which could have resulted in disastrous outcomes for the Air cargo industry in SRI Lanka. At the, same time SLFFACSL firmly believes that the monopoly status granted to Sri Lankan Airlines for ground handling of cargo should be revisited fast in the best interests of ensuring cost effectiveness & enhanced efficiencies for Air cargo handling. SLFFACSL remains committed to work closely with related Government agencies such as Airport & Aviation Services Limited to facilitate such a regime.
Whilst SLFFACSL sincerely appreciates the support extended over the years, on the part of shareholders and all members of SLFFA as a whole, the Company looks forward to their continued patronage in the future too.
OVERVIEW OF THE ECONOMY
The Sri Lankan economy continued to recover steadily in 2024, achieving a robust 5.0% real economic growth, after two years of annual contraction. This recovery was steady throughout the year, with all four quarters posting positive Gross Domestic Product (GDP) growth rates for the first time since 2017. The road to recovery was difficult, but notably faster compared to most debt-distressed countries.
Inflation eased and the country entered a period of deflation since September 2024 driven largely by energy price reductions. The external sector performance remained strong during the year 2024. The Sri Lanka rupee appreciated under the flexible exchange rate policy. The overall growth is mainly attributable to Industry activities, driven by the revival of manufacturing and construction activities, while services activities also contributed significantly, mainly supported by the sustained growth in accommodation and transport services.
Furthermore, notable improvements in credit were observed in the wholesale and retail trade; financial and business services; communication and information technology; and shipping, aviation, and freight forwarding subsectors, indicating a revival in services-related economic activity.
(Source – Central Bank of Sri Lanka Economic Report 2024)
OVERVIEW OF THE INDUSTRY
In the Services sector, Shipping, Aviation and Freight Forwarding sub sectors showed a healthy recovery in 2024, with a 2.4% growth compared to the 0.2% contraction in 2023. The surge in tourism had a positive ripple effect on sectors, including accommodation, food and beverage services, transport, and trade, contributing to this growth. Credit to the Services sector (which accounts for 27.4% of outstanding credit) also showed an expansion, with a y-o-y growth of 12.3% by end 2024.
The surplus in the services account rose to USD 3.4 bn in 2024, compared to USD 3.1 bn in 2023. This growth was driven by strong inflows to key services sectors, including sea and air transport, computer and information technology.
Sri Lanka’s services trade, a crucial component in the current account of the country’s balance of payments (BOP), has grown significantly, outpacing the expansion of merchandise exports in recent years. As a key contributor to foreign exchange earnings, the growth in services exports is driven by sectors such as port and airport services, tourism, computer and information technology/ business process outsourcing (BPO).
(Source – Central Bank of Sri Lanka Economic Report 2024)
CIVIL AVIATION
In 2024, Sri Lanka’s civil aviation sector experienced significant growth across passenger, aircraft, and cargo movements, underscoring the country’s strengthening position in regional air transport.
The nation’s airports collectively handled approximately 8.88 million passenger movements, marking a 17.69% increase compared to 2023. This surge is largely attributed to the expansion of airline services and strategic initiatives aimed at boosting tourism. Notably, Bandaranaike International Airport (BIA) served over 30 airlines, including major international carriers.
The total number of aircraft operations reached 56,289 in 2024, reflecting a 20.69% growth from the previous year. Cargo movements also saw a substantial rise, with 192,498 metric tons handled in 2024, representing a 21.13% increase compared to the previous year. This growth underscores the critical role of Sri Lanka’s aviation infrastructure in facilitating trade and commerce within the region.
PORT SERVICES
In the Port sector, significant progress was made during the year on the development of the East Container Terminal (ECT) and West Container Terminal-I (WCT-I) at the Port of Colombo. These two strategic infrastructure projects are slated for completion in 2026 and 2027, respectively.
Once operational, ECT and WCT-I are expected to significantly enhance the handling capacity and operational efficiency of the Port of Colombo. This will not only bolster its position as a leading maritime hub in the region but also enable it to better compete with other regional ports by tapping into emerging opportunities in global shipping and trade.
Moreover, the expansion aligns with the growing demand for container throughput and underscores Sri Lanka’s commitment to strengthening its role in the international logistics and supply chain network.
(Source – Central Bank of Sri Lanka Economic Report 2024)
ACKNOWLEDGEMENT
In conclusion, the Board of Directors is very grateful to our shareholders for their support, confidence and trust in the Directors of the Company. We also wish to thank all Freight Forwarders and consignees who have continued to support the Company by moving their cargo through our terminal. I also wish to thank my colleagues, the Board of Directors, for the advice and the guidance given, BDO Corporate Services (Pvt) Ltd, and most of all our staff, for their tireless effort and commitment to continue to maintain high standards during the period under review.”