Contents

1.0 Background of the Study ....................................................................................................... 2 1.1 Role of the Freight forwarder ............................................................................................ 2 1.2 Apparel Industry ................................................................................................................ 4 2.0 Research Problem .................................................................................................................. 6 3.0 Research Questions ............................................................................................................... 9 4.0 Objectives of the Research .................................................................................................... 9 5.0 Scope of the Study............................................................................................................... 10 6.0 Literature review ................................................................................................................. 10 7.0 Conceptual Framework ....................................................................................................... 17 8.0 Hypothesis ........................................................................................................................... 18 9.0 Contribution of the Research............................................................................................... 19 10.0 Research Design ................................................................................................................ 19 11.0 Data Collection Procedure ................................................................................................ 20 12.0 Methods of Data Analysis ................................................................................................. 20 13.0 References ......................................................................................................................... 21

1.0 Background of the Study

The logistics industry is becoming one of the most profitable and required industry in every corner of the world (Singh, 2009). It is a part of the supply chain in businesses plan process; it implements and controls the efficient flow and storage of goods and services that are tangible. It can be highlighted that the process encompasses the information flow from the point of origin to the point of consumption in order to meet the customers requirements. Generally the modern logistic industry continue to evolve as it reduces the transport and distribute cost for importer and exporters, improved customer service, improved cycle time and free up capital in manufacturers and marketers non core areas. Chin et. al (1999) highlights the changing context of the global logistics industry as follows. They state that the increase in global competition and the rapid progress of IT has led to the broadening of the scope of the logistics industry from the provision of just transport and warehousing facilities to purchasing, distribution, inventory management, packing,

manufacturing and customer service. More importantly logistics is increasingly being outsourced in order to achieve competitive advantage. When it comes to the Sri Lankan context with the opening up of the new export and import markets for our products and services such as world renowned brand names in tea, garments, rubber, fiber and other value added products and services items, through air and sea gateways Sri Lankan has been able to spread out their products throughout the world. With the rapid expansion in international trade saw the growing need for efficient supply chain solutions. In this backdrop, the freight forwarding and logistics industry in Sri Lanka took on a vital and active role. The speed of its expansion created intense competition as well as haphazard growth.

1.1 Role of the Freight forwarder Freight forwarder is an intermediary service provider that collects export cargo from the customer, re-arranges them and forwards them to cargo carriers in a most economical way. When it comes to imports they break bulk into retail and distribute locally. They also provide tracking and tracing from origin to destination point in the supply chain. Freight forwarders also coordinate transshipment cargo that move via the Colombo port or Airport. 2

A freight forwarder books space with a carrier, who offers a special rate based on the volume of cargo to be moved. Depending on the size and nature of the cargo the freight forwarder may use a variety of modes of transport, viz. shipping lines, air, road and rail freight. When considering the annual export and import container throughput in Sri Lankan shown in Tables 1.1 and 1.2 below it can be seen that export throughput has been reducing with the empty ratio going upto 50%, whereas import throughput has been increasing with the empty ratio coming down to 6% from 14%. This shows that the use of Sri Lanka as an export destination is reducing in significance, despite the favourable country conditions.

Table 1.1: Annual Export Container Throughput Year 2008 2009 2010 2011 Laden 229,206 223,398 244,268 125,460 Empty 176,816 154,000 226,328 124,624 Empty % 44% 41% 48% 50%

Source: Sri Lankan Freight Forwarders Association (2011)

Table 1.2: Annual Import Container Throughput Year 2008 2009 2010 2011 Laden 358,994 317,732 415,291 230,260 Empty 48,255 51,200 46,357 15,471 Empty % 12% 14% 10% 6%

Source: Sri Lankan Freight Forwarders Association (2011)

However, the use of Sri Lanka as a transshipment destination has been emphasized by the continuous increase in transshipment volumes. This shows the strategic importance of Sri Lanka from a global logistics perspective.

Table 1.3: Transshipment via Colombo Port Year 2008 2009 2010 2011 Laden 2,215,777 2,277,090 2,767,833 1,376,906 Empty 569,645 355,965 327,756 178,475 Empty % 20% 14% 11% 11%

Source: Sri Lankan Freight Forwarders Association (2011)

Table 1.4 below shows a summary of the performance of the port services as published by the Central Bank of Sri Lanka. Table 1.4: Performance of port services
1 Item Vessels Arrived (No.) Colombo Galle Trincomalee Total Cargo Handled (mt 000) Colombo Galle Trincomalee Total Container Traffic (TEUs 000) (b) Transshipment Containers (TEUs 000) (b) Revenue (SLPA) (Rs. mn) Operating Expenditure (SLPA) (Rs. mn) Employment (No.) (SLPA) Colombo Galle Trincomalee 2001 4,014 3,570 117 327 27,062 24,741 662 1,659 1,727 1,195 16,387 12,193 18,561 16,744 737 1,080 2002 4,062 3,787 76 199 28,363 26,273 526 1,564 1,765 1,218 15,667 12,870 17,910 16,157 752 1,001 2003 4,032 3,838 73 121 30,500 28,198 482 1,820 1,959 1,371 16,356 15,134 13,418 12,522 638 776 2004 3,883 3,688 88 107 33,959 31,299 578 2,082 2,221 1,531 17,861 18,227 13,233 11,888 634 711 2005 4,139 3,929 114 96 37,300 34,522 655 2,123 2,455 1,716 20,552 13,183 13,527 12,217 622 688 2006 4,469 4,228 100 141 42,661 39,428 735 2,498 3,079 2,330 23,004 19,385 13,660 12,382 615 663 2007 4,710 4,326 87 297 46,344 43,502 627 2,215 3,381 2,578 25,913 22,415 13,667 12,470 577 620 2008 4,814 4,424 68 322 50,582 47,960 459 2,163 3,687 2,785 25,142 22,201 13,715 12,548 553 614 2009 4,456 4,114 32 310 48,778 46,373 167 2,238 3,464 2,712 23,331 21,390 13,367 12,263 513 591 2010 4,067 3,910 48 109 61,240 58,768 318 2,154 4,137 3,205 28,279 23,892 12,828 11,747 480 601

3 4 5 6 7

Source: Central Bank Annual Report (2010)

1.2 Apparel Industry Kelegama (2005) discussed about the history and the prominence of the apparel industry in Sri Lanka as follows. Sri Lanka was remarkably famous for their agricultural exports before the 4

liberalized economy took place. When Sri Lanka liberalized their economy in 1977 the industrial sector accelerated its growth in a significant way. Especially the countrys garment sector took off large part of this sector. Mainly as a result of quota-hopping East Asian garment exporters who were attracted by the countrys liberal trade regime and relocated their already wellestablished garment businesses to Sri Lanka. Sri Lanka was able to provide the labor at a considerable lowest price when compared to other countries. Local entrepreneurs starts their own garment enterprises to exploit the garment quota which was assist by the liberal trade agreements and subsequently incentives granted by the Board of Investments (BOI) to selected industries. Kelegama (2005) explained about the history of the Sri Lankan apparel industry as follows. In the early 1980s, garment exports were growing rapidly and by 1986 garments accounted for the largest share of all exports (27 per cent). By the late 1980s, garment industry in Sri Lanka was referred to as glorified tailor shops because, despite a decade of growth, its links with other industries remained low and the value added remained low as before. The garment exporters found it difficult to compete without a devaluation of the Sri Lankan currency, and started to lobby the Government to this effect. Since the Government did not allow a devaluation of the currency, the garment industry lobbied for duty-free status for textile imports with the aim of bringing down their production costs. The Government granted this request without considering the repercussions on the domestic textile industry. Consequently, the textile industry virtually collapsed and no effort made by the government, for example, by offering subsidized interest rates to rescue the textile industry, had any major impact. In fact, three of the privatized textile factories (Veyangoda, Pugoda and Mattegoda) that were gradually switching to manufacture textiles to meet the needs of the export-oriented garment producers had to be closed down. Table 1.5: Textile Sector performance
Textiles and Garments Manufactured Woven Fabrics Knitted /Crocheted Fabrics Yarn Garments Other Made Up Textile Articles Other 2006 4,956 1,244 2,435 303,263 4,530 4,401 2007 4,278 2,058 3,992 347,670 8,681 2,784 2008 3,789 2,795 2,959 355,995 8,181 2,306 2009 3,835 2,045 3,089 358,374 6,634 2,169 2010 4,501 2,329 3,483 374,041 8,029 3,020

Source: Central Bank Annual Report (2010) 5

According to the Central Bank Annual Report of Sri Lanka (2010), the textile sector grew by 5.2% during 2010 compared to 0.6% in 2009. Currently this sector is facing a number of problems, high level of competition draw by regional manufacturers, withdrawal of GSP+ concession, high cost of skilled labor and imported raw materials fueled the problems. But industry remains competitive market due to the high quality state but this has increase the cost. Though the strategy of the ethical garment promoted the increase of the cost remain as a problem. The Central Bank of Sri Lanka states that when it comes to logistics cost the following points can especially be noted. The number of vessels arrived has increased; but it is noted that this has been decreasing during last few years. Total cargo handled has also not that much increased and total Transshipment Containers are also not considerably high. Though the revenue has not increased in last few year there is a small increase in the last year by 20% and the cost has also increased by 11%. Logistic practices are one of the most important practices in the garment industry. Customer Service, Transport, Inventory Management, order processing, warehouse and distribution center and information management are all important elements of the logistics chain (Appelbaum and Gereffi, 1994).

2.0 Research Problem

Though Sri Lanka has a remarkable name for their garments worldwide it could be seen to be faced with some major issues (Dheerasinghe, 2003), especially because of logistic industry failures which has become a significant constraint. The problems can be simplified as follows: Due to the limited size of Sri Lankas domestic market, targets set by the government on export growth cannot be met without a significant improvement in export performance Lack of focus on Asian supply chains, especially emerging economies such as India and China 6

Concerns by foreign buyers over perceived long delivery time and unreliable supply in Sri Lanka garments sector

While considerable attention has been focused on the countrys performance in the World Banks Ease of Doing Business Index, much less has been discussed or done to address an even worse ranking on the World Banks Logistics Performance Index (LPI). This point was further stressed in an article published in the Sunday Times (2011) which discussed about the challenge posed to export growth from poor logistics. In fact the article stated that Sri Lanka was ranked 137th out of 154 countries in the LPI in 2009. The LPI is composed of indicators relating to customs, infrastructure, logistics competence, shipments, tracking and tracing and timeliness. Within the South Asia region, Sri Lankas ranking is even below Bangladesh, which is a least developed country. According to the LPI, Sri Lankas performance is particularly weak in clearance by border control agencies (particularly customs), logistical competence and ability to track and trace consignments. There has been slow progress in implementing customs reform. Sri Lanka has made less progress than other countries in South Asia, such as Bangladesh and India. Sri Lankas LPI ranking also reflects logistics related problems with both road and rail infrastructure. These include congested road access to the Port of Colombo and the poor quality of trucking and rail services. Both trucking and rail costs exceed those in Bangladesh and India. The railway sector accounts for only about one percent of freight movements and is characterized by a large cost structure. In addition the logistics sector has been slow to provide value added services for transshipment through the Colombo port. The government can encourage this by providing free zones and customs procedures that will enable services to be provided efficiently. Failure to do this can make Colombo vulnerable to losing market share to Indian ports that are being upgraded, particularly as pure transshipment cargo is foot-loose. Colombos ability to maintain its competitive position vis a vis other regional hubs, and increasingly efficient Indian ports, will also depend on its ability to replicate the level of efficiency attained by the South Asian Gateway Terminal (SAGT) in the operations run by the Sri Lanka Ports Authority and the new facilities being constructed in the South Harbor. As well as according to the LBO (2011) Mohandas, chairman of the Sri Lanka Freight Forwarders' Association also explained that Sri Lankas logistic industry has warned that length delay in automating cargo clearing procedures were eroding the islands competitiveness. He 7

further summarized that the critical issues that persist at the port in terms of lack of labour in the company services, delays in automated customs procedures, port issues and infrastructure issues. This is further re-iterated by the fact that the island slipped further down the World Bank logistics performance index. An article in the Financial Times (2011) about revitalizing the logistics and transport industry in Sri Lanka saw Prithwijit Maitra, General Manager of Maersk, a global shipping line talk about the challenges faced by the Sri Lankan logistics industry. He stressed that the lack of reliability due to the inability to deliver goods on time, lack of cooperation amongst the various stakeholders and the need to reduce to waste. Another article published in the Financial Times (2011) discussed about the measures that need to be taken in order to improve the competitiveness of the logistics industry in Sri Lanka. Sri Lanka Freight Forwarding Agents Vice Chairman Mr. Mohandas stated that Sri Lanka needs to look closely at every process if it wanted to be positioned as a logistics hub in South Asia. The need to improve competency in training and education, the lack of port capacity, rises in freight prices and the escalating price of oil were other issues that were highlighted. In addition, operational inefficiencies, direct and non direct taxation and idling (waste and inefficiency) has plagued the entire industry. Traditional processes and the lack of automation in clearing processes is clearly a concern affecting the level of port efficiency. In fact the need to inculcate more IT into the process was stressed as there was no online tracking of cargo. Further, the heavy congestion on roads was seen as a problem faced by companies when clearing their cargo. Further, a study on the problems in developing logistics centers for ports in the Economic and Social Commissions for Asia and the Pacific (ESCAP) region, of which Sri Lanka is a member, highlighted the following barriers. Table 2.1: Barriers to building logistics centers in the ESCAP region Problem areas Financial aspect Service provider aspect Shortage of land space in port area Regulation aspect Major problems Insufficient infrastructure Lack of professionals and skilled workforce Conflict between port and city. Expensive land cost. Administrative red tape 8

Poor service level Source: UNESCAP (2002)

Poor services in many ports

A study by the ADB (2007) on the expansion of the Colombo Port stated that the port had only a depth of 15 meters (m). This meant that it cannot berth the latest generation containerships, i.e., 9,000 TEU vessels, whilst its competitors in Dubai, Singapore, Salalah, and Tanjung Pelepas can all berth 9,000 TEU vessels. Shipping economics mean that the trend is toward larger container vessels. All hub ports therefore need to upgrade their infrastructure to handle these larger vessels or see their competitive position eroded.

3.0 Research Questions

Further to the literature review that was carried out this study attempts to answer the following research question. What are the barriers in the Sri Lankan Logistics industry which prevent the island from being internationally competitive? (A Study based on the Apparel Industry of Sri Lanka)

4.0 Objectives of the Research

The objectives of this research can be outlined as follows. Understand the present status of the logistics industry in Sri Lanka. Identify the barriers in making Sri Lanka a Global Logistics hub. To make recommendations to improve logistics in the Sri Lankan Apparel Industry.

5.0 Scope of the Study

This study will attempt to identify the logistics problems faced by the apparel industry in Sri Lanka, and will be limited to cover the Sea Freight operations at the Colombo port. Further, the study will capture all stakeholders of the logistics supply chain in order to understand the problems that persist.

6.0 Literature review

What is Logistics? The Council of Logistics Management has adopted this definition of logistics: Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements. Studies on Logistics performance One of the measures frequently used internationally in identifying the logistics performance between countries is the Logistics Performance Index (LPI) devised by the World Bank. It is in effect the weighted average of the country scores on six key dimensions, viz. Efficiency of the clearance process (i.e. speed, simplicity and predictability of formalities) by border control agencies, including Customs; Quality of trade and transport related infrastructure (e.g. ports, railroads, roads, information technology); Ease of arranging competitively priced shipments; Competence and quality of logistics services (e.g., transport operators, customs brokers); Ability to track and trace consignments; Timeliness of shipments in reaching destination within the scheduled or expected delivery time

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A study on the logistics barriers to international operations by Yu (2011) attempted to identify the extent of criticalness of identified major logistics problems. The list of problems includes; Lack of logistics infrastructure facilities Lack of means of transportation Deficiency of road conditions Poor service quality of local 3PL providers Lack of information on traffic laws and regulations Subcontracting with local logistics providers Selection of local logistics providers Reliability of local logistics providers Regulatory restrictions Local protection regulations Maintenance of quality Rise in logistics costs Rise in local labor costs This study also further studied product related problems that arose due to logistics problems by classifying them into 03 major types, viz. quality, cost and delayed delivery. Quality related issues discussed about the lack of container trucks, and product damage due to sub standard containers, while cost issues pertained to rough treatment of products, instability of ocean freight and rising labour costs. Finally, the issue of delayed delivery discussed problems of labour shortages and differences in logistics practices between nations. Another study on Chinas logistics industry by Zhang and Figliozzi (2010) identified eight major categories of transport and logistics challenges. These include; Low efficiency and High logistics costs Congestion Lack of a nationally integrated transport network Regulations and Protectionism Capacity of rail freight Poor IT infrastructure and inability to use advance technology 11

 Underdeveloped warehousing service Efficient port operation A study conducted by Rajkarnikar in 2010 on the Adequacy and Effectiveness of Logistic Services in Nepal identified 03 key aspects that should be looked into in logistics. These include: Adequacy of trade logistic services measured in terms of their available quantity or volume in relation to need. Efficiency of trade logistics. Cost Effectiveness of trade logistics Singh (2009) discussed about some of the critical aspects pertaining to the sustenance and growth of the Indian Logistics Industry, which can be outlined as follows. Increasing trade volumes Reducing logistics costs Improvement in infrastructure This study about the problems that persist in the Indian logistics industry. High cost and low margins Lack of economies of scale Non-uniform tax structure Lack of trust and awareness on outsourced logistics amongst shippers Poor physical and communications infrastructure Low IT penetration Lack of skilled manpower Unavailability of total logistics solution providers A survey in the National Capital Region of India (apparelresources.com) attempted to identify the key areas with respect to apparel logistics, and the most frequent and critical issues that arise in each of these areas. This is shown in Table 5.1 overleaf.

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Table 5.1: Major Issues/Challenges in the Apparel Logistics Process

Issues/Problems/Situations Purchase Order related L/C (Letter of Credit) related Most Frequent Delay in issuance Delay in issuance Most Critical Error in order value, delay in issuance LC terms not in line with agreed terms, Error in quantity and value Time of final documentation for shipment Final quantity/weight/ volume cannot be Final quantity/weight/ volume cannot be

ascertained till shipment is fully packed and ascertained till shipment is fully packed and ready ready to ship Change in final quantity after inspection to ship

Approval from buying agency/ buyer, revised Approval from buying agency/buyer booking/intimation has to be sent to FF (Freight Forwarder)/ buying house

Issues

which

may

arise

between Delay in issuance of documents by FF, request Time taking operating procedures/approvals of FF

forwarder and exporter in terms of of document on urgent basis by exporter meeting documentation requirements Custom clearance of shipment EDI (Electronic Data Interchange) related Valuation issues and mismatch of merchandise issues Issues with interstate border Non availability of valid papers and license with what was mentioned in documents Non availability of valid papers and license

documentation Issues related to post-shipment Delay in release of FCR (Forwarders Certificate Timely availability of documents for payment of Receipt)/ HBL (House Bill of Landing)/HAWB realization (House AirWay Bill) by FF Operational issues after shipment is No major frequent problem Damage of merchandise due to unexpected rains

documentation

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ready and moves out of premise Challenges being faced at the time of Arrival of cargo after cutoff date, bad Late arrival of cargo after CFS cutoff date cargo delivery at CFS (Container Freight condition of cargo upon arrival Station) Situations that may arise if ship date is Buyer asking for discounts or asking to air at Shipper bearing the overcharge of air shipment missed own cost and getting an extension

CFS cut off to catch intended vessel is Requesting FFs to accept the cargo late Requesting FFs to accept the cargo late through missed Issues in booking cargo through buying agents special approval buying agents special approval

with Bookings not placed on time or placed late Bookings not placed on time or placed late due to due to which cargo is not accepted at CFS which cargo is not accepted at CFS

FF/consolidator/ carrier

Challenges in release of container from Buyer may not agree to approve factory Buyer may not agree to approve factory stuffing FF or carrier for stuffing of cargo in stuffing factory Challenges which may come up when Delays when merchandise is en route to port Transit delays en route to port shipment is en route to port by rail or for loading by all modes of transport road or by air Issues that may come up when goods are No major frequent issue exported out of India, at trans-shipment port or at final destination Challenges that may come up at port or Space issues at CFS during peak season, Delay in handing over of merchandise to FF, airport embargo by airline shipping line or airline results is cargo not being shipped on time as per buyers ETA requirement Cargo must be tracked and monitored very closely till merchandise reach final destination

Source: www.apparelresources.com 14

A study on the problems faced by Indian shipping agents carried out by Tiwari and Khandelwal (2010) identified potential problems that could occur when making an export consignment. Non-availability of containers Long waiting time for clearance Long waiting time for containers Insufficient pallet providers Poor quality of pallets provided by maker Long time taken for documents clearance Less frequency of container train Shrink-wrapper not being available on time Container truck not being available on time Higher round trip costs Round trip containers not being available on time Inability to make shipment within a short period Congestion on port Preference given on loading and unloading of the containers Price discrimination by pallet providers Many documents for export clearance causing delay in work Dominance of officers Lack of awareness of the overall proceedings to be done in export Poor connectivity Poor government publicity Non-professional attitude of Government officers Less night navigation

Appelbaum and Gereffi (1994) demonstrated the apparel value chain as shown in Figure 5.1 overleaf. This study attempted to identify the key stakeholders and their respective contribution to the apparel value chain.

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Figure 5.1: Apparel Value Chain

Source: Appelbaum and Gereffi (1994)

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7.0 Conceptual Framework

The following conceptual framework has been devised based on the Logistics Performance Index used by the World Bank (see section 3.0). Figure 7.1: Conceptual framework

Independent Variables

Efficiency of the clearance process Quality of infrastructure Ease of arranging shipments Competence and quality of logistics services Perceived level of Barriers in logistics

Ability to track and trace consignments Timeliness of shipments

The Logistics Performance Index as explained by the World Bank (2007) is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics friendliness of the countries in which they operate and those with which they trade. They combine in-depth knowledge of the countries in which they operate with informed qualitative assessments of other countries with which they trade, and experience of global logistics environment. Arvis et. al (2010) explains the formulation behind the logistics performance index. The LPI is constructed from the six indicators shown in Figure 7.1 using principal component analysis (PCA). PCA is a standard statistical technique used to reduce the dimensionality of a dataset. In the LPI, the inputs for PCA are country scores on the six questions above, averaged across all 17

respondents providing data on a given overseas market. Scores are normalized by subtracting the sample mean and dividing by the standard deviation prior to conducting the PCA. The output from the analysis is a single indicatorthe LPIthat is a weighted average of those scores. The weights are chosen to maximize the percentage of variation in the original six indicators accounted for by the LPI. Each respondent to the survey from which the World Bank developed the LPI was also asked to also evaluate the logistics performance of the country in which they are based and provide time and cost data relating to it. The World Bank has also published the data which cover these aspects of trade (World Bank, 2007): the percentage rate of physical inspection of containers; the number of days for customs clearance; the time for exports (median) and imports (best and median) between shipper and port. The best relates to the 10th percentile of shipments and the median to the 50th percentile; the number of border agencies for exports and imports; the percentage of respondents who consider there is a simple and inexpensive review process available; and the typical charge in US dollars to import and export a 40-foot container or semi-trailer.

8.0 Hypothesis
Tiwari and Khandelwal (2010) in their study on the problems faced by Indian Shipping Agents developed the following hypotheses, based on the hypothetico Deductive method, which have been adapted for the purpose of this study. H1: There is no significant impact of the level of experience in the industry towards the perception on problems faced. H2: There is no significant variation of the perception on problems faced while shipping between the different stakeholder groups. H3: There is no significant variation or impact of qualification (i.e. the level of education) on the perception towards problems faced. 18

Tiwari and Khandelwal (2010) developed 24 attributes across the six performance dimensions of the logistics performance index which was then presented to participants in the logistics industry in Indore, India. The participants were required to express their perception on each attribute on a 5-point scale ranging from 5=Strongly Agree to 1=Strongly Disagree. The results showed that the level of experience did not matter when it came to the perception on problems faced; there was no significant variation between the perceptions of various stakeholder groups, and that the level of education did not have any impact on the perception levels.

9.0 Contribution of the Research

This is a pioneering study in a Sri Lankan context which attempts to identify possible improvements in infrastructure and logistics in order to improve the competitiveness of Sri Lanka as a global logistics destination with specific application to the apparel industry. In effect, this study deals with both the private and public sector involvement that is required to boost port volumes, and position the Colombo port as a Global Logistics Hub.

10.0 Research Design

This study attempts to identify the main types of logistical problems that are faced by the apparel industry when making a shipment of goods via the Colombo port. In effect, the study is of a descriptive nature attempting draw specific conclusions about the logistical problems faced by apparel exporters in Sri Lanka. Thereby this study hopes to understand the reasons for the reluctance of global apparel players to enter Sri Lanka from a logistical perspective. As this is a pioneering study conducted in a Sri Lankan context it is necessary to obtain primary data for the purpose of this study. A Convenience Sample will be selected to cover all stakeholders in the logistics industry, due to the difficulty in obtaining a proper sampling frame for certain stakeholder groups. A closed-ended questionnaire will be provided to 50 respondents comprising of Commercial Managers of 10 freight forwarding companies, Shipping & Documentation heads of 10 buying houses, 10 garment exporters, 10 members of the Sri Lanka Ports Authority and 10 foreign buyers.

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11.0 Data Collection Procedure

It is expected to collect the data using an interviewer administered questionnaire, in order to bring in clarity and accuracy to the data collection process. This is due to the diverse education levels of the respondents selected for the sample. The questionnaire will have specific questions under each of the six key dimensions identified under the conceptual framework. The respondents would be asked to provide their opinion on each using a 5-point scale; 5 = Strongly Agree 4 = Agree 3 = Neutral 2 = Disagree 1 = Strongly Disagree In addition, they would be asked to rank the issues in a priority order in order to understand the extent of criticalness of the logistical problems at the Colombo port.

12.0 Methods of Data Analysis

The data will be analyzed using SPSS and the following analyses are expected to be carried out; Determine the specific logistical issues that persist at the Colombo port by obtaining the mean response on each of the questions presented to the respondents Obtain an overall ranking of the issues by calculating an average based on the ranking carried out by the respondents

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13.0 References
World Bank website. Logistics Performance Index. http://info.worldbank.org/etools/tradesurvey/mode1a.asp Yu, L. (2011). Logistics Barriers to International Operations: A Case Study of Japanese Firm in China. IPEDR vol.4. IACSIT Press, Singapore Zhang, Z. and Figliozzi, M. A. (2010). A Survey of China's Logistics Industry and the Impacts of Transport Delays on Importers and Exporters. Transport Reviews, vol. 30, no. 2, pp. 179-94. Rajkarnikar, P.R. (2010). Adequacy and Effectiveness of Logistic Services in Nepal: Implication for Export Performance. Asia-Pacific Research and Training Network on Trade Working Paper Series, No. 79, April 2010. Singh, S. (2009). Indian Logistics Industry. Oriental Institute of Management, Mumbai. Apparel Resources website. Challenges in Apparel Logistics: Survey in the NCR http://apparelresources.com/new/next.asp?cod=I&msg=10809 Tiwari, S. and Khandelwal, S. (2010). A Demographic Study of Problems Faced by Indian Shipping Agents with Special Reference to Indore. The IUP Journal of Management Research, Vol. 9, No. 4, pp. 61-68, April 2010. Lanka Business Online. Sri Lanka logistics industry bemoans slow pace of e-commerce effort. 28th June 2011. 09:15:02. http://www.lankabusinessonline.com/fullstory.php?nid=14255922. Accessed on 1st December 2011 Chin, F. C., Bae, J. H. and Kim, G. O. (2009). A Survey on the Logistics Service Providers in Shanghai. International Journal of Physical Distribution & Logistics Management. Volume: 29, Issue: 9, Pages: 1-25. Central Bank Annual Report (2010). Statistical Appendices. Table 37: Performance of the Port Services. Central Bank of Sri Lanka. Central Bank Annual Report (2010). Statistical Appendices. Table 72: Selected Industrial and Mineral Exports. Central Bank of Sri Lanka.

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Kelegama, S. (2005). Ready-Made Garment Industry in Sri Lanka: Preparing to Face the Global Challenges. Asia-Pacific Trade and Investment Review Vol. 1, No. 1, April 2005. pp 51-67. Appelbaum, R. P. and Gereffi, G. (1994). Power and profits in the apparel commodity chain, in Edna Bonacich et al. (eds), Global Production: the Apparel Industry in the Pacific Rim (Philadelphia, PA, Temple University Press, 1994), pp. 42-64 Sunday Times. (2011). Export Growth: The challenge of poor logistics. June 05, 2011. http://sundaytimes.lk/110605/BusinessTimes/bt032.html. Accessed on 15th December 2011. Financial Times (2011). Revitalizing the logistics and transport industry in Sri Lanka. 01st November 2011. http://www.ft.lk/2011/11/01/revitalising-logistics-and-transport-in-sri-lanka/. Accessed on 18th December 2011. Financial Times (2011). Revitalizing the logistics and transport industry in Sri Lanka. 23 rd June 2011.http://www.ft.lk/2011/06/23/gaining-a-competitive-advantage-through-logisticsdevelopment/. Accessed on 18th December 2011. UNESCAP. (2002). Problems in developing logistics centers for ports in the ESCAP region cited in Commercial Development of Regional Ports as Logistics Centres. pp 53-64. ADB. (2007). Proposed Loan Democratic Socialist Republic of Sri Lanka: Colombo Port Expansion Project. Report and Recommendation of the President to the Board of Directors. Project Number: 39431 World Bank. (2007). Connecting to Compete: Trade Logistics in the Global Economy,

Washington D.C.: World Bank. http://siteresources.worldbank.org/INTTLF/Resources/lpireport.pdf. Accessed on 14th December 2011. Dheerasinghe, R. (2003) Garment Industry in Sri Lanka Challenges, Prospects and Strategies. Staff Studies: Central Bank of Sri Lanka. Vol. 33, 1 & 2. pp 33-72. Arvis, J. et al. (2010). Connecting to Compete 2010: Trade Logistics in the Global Economy. The Logistics Performance Index and its Indicators. World Bank publications.

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