Shipping costs have soared nearly 600 dollars for a standard 20-foot container (TEU) over the past six months as a result, compounding problems for Sri Lankan exporters who compete on price, innovation and time with their large northern neighbour.

"Some of the bigger shipping lines have changed their schedules over the past six months and the crisis is affecting exports of garments, tea, rubber and coir (coconut fibre)," said Sri Lanka Shipper's Council chairman Jayanath Perera.

Clothing, which accounts for more than half of the island's near seven billion dollar export trade, is especially feeling the heat as exporters face tight deadlines from buyers such as Victoria's Secret, Gap, Nike and Marks and Spencer.

"The next alternative is to airlift shipments but that costs 75 percent more than sea freight. Air freight is not an option for a price sensitive industry like ours," said shipping consultant Rohan Masakorale.

Masakorale, also a senior member of the clothing industry's Joint Apparel Association Forum, said Colombo port is now fighting to retain its status as South Asia's transshipment hub and to stem the flow of ships to India.

India has embarked on a major modernisation drive of its main ports, slashing charges to attract more international shippers to carry its booming cargo volumes.

Colombo's port, which straddles the Indian Ocean trade from the Strait of Malacca into the Arabian Sea and then onto the Suez Canal, had been considered ideal for ships making the voyage from Asia to Europe and the US east coast.

But big shipping lines such as Maersk, the United Arab Shipping Company, Norasia Container, K-line and Hanjin now bypass Colombo and call directly at Indian ports like Mumbai.

"Earlier, these ships called on Colombo to pick up Indian cargo and then carry it to Europe. There is a shortage now of around 600 TEUs of cargo space each week out of Colombo," said Perera.

"In some instances, the rate increases are very high and when taken in context of reduced flexibility and capacity, it is potentially very damaging," said Dilhan Fernando, director at Dilmah, one of Sri Lanka's big tea exporters.