Issues in logistics management stifle Nepal’s trade potential

July 30, 2018

The Kathmandu Post, 30 July 2018

Nepal’s trade potential is being stifled by a wide range of issues related to logistics management during cargo movement from the Kolkata-based seaport to the country’s entry points along the Nepal-India border.

This has resulted in higher transit costs to transport goods into Nepal.

According to the World Bank’s latest global Logistics Performance Index (LPI) report, Nepal has made significant progress in customs procedures, trade logistics quality, tracking system and timeliness of delivery. As a result, the country’s LPI has moved up 10 places to 114th position among 167 countries studied under survey by the multilateral lending institution.

Despite the progress, Nepali traders are still facing a number of hurdles while transporting goods through Indian land. The stakeholders opined the views during a programme on 24th Cargo Day organised by Nepal Freight Forwarders’ Association (NEFFA) on Sunday.

Increasing traffic at Kolkata Port, unavailability of adequate number of railway rakes, congestion at Birgunj Inland Container Depot, lack of full-fledged operation of Birgunj Integrated Check Post and excessive documentation process, among others, were the main concerns that the speakers put forth during the programme.

According to Kolkata Port Trust, cargo movement at the Indian port has been increasing at a rate of 14 percent annually.

The Indian port receives around 80,000 Nepal bound containers (10 percent of the total 800,000 containers shipment) daily. Similarly, Nepal trades 2.4 tonnes of goods (out of 58 million tonnes in total) via the port almost every day.

The Indian port authority provides 10 to 20 days turnaround time for a Nepal bound railway rake. Similarly, Nepal bound containers are provided 180 day free-storage facility at the port.

Speaking at the programme, Vinit Kumar, chairman of the Kolkata Port Trust, said they were looking to increasing the cargo handling capacity mainly at sea-port of Kolkata and Haldiya. “To address the present problem, Nepal should also initiate plans to upgrade its cargo handling points including the one at Birgunj Dry Port.”

NEFFA President Prakash Singh Karki, pointed out the monopoly of Container Corporation (CONCOR) of India, the sole service providing agency at Kolkata port, for the delay in cargo movement.

“Had we been able to use an alternative railway service via the port, it could have eased in getting the railway rakes to ferry the cargo on time,” said Karki adding that the shipping company has also been charging Goods and Service Tax on the third country export of Nepali goods.

NEFFA Past President Rajen Sharma said that Nepal bound cargos have to fulfill compliance procedures under 37 different documentation steps, which takes an additional 3-4 days. “There is a need for enforcing a single window system and validation of the online documentation to reduce the number of days in cargo movement,” Sharma opined.

Presenting an instance that Nepal has been facing multifold cost and time compared to the cargo movement in other countries, President of Confederation of Nepalese Industries Hari Bhakta Sharma stressed on the need for operating a dedicated railway line by the government.

Commerce Secretary Chandra Kumar Ghimire said the government has been working on a number of issues related with improving the logistics of cargo handling. Ghimire expressed that most of these issues could be addressed with the review of Nepal-India Trade and Transit Treaty and Railway Service Agreement.



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