Transforming Logistics Landscape
Prolonged delays in cargo movement, high logistics cost and lack of visibility of cargo in transit are some of the perennial issues that are synonymous with logistics of Nepal-based cargo. But with a stable government in place, these issues may end soon as the logistics landscape for Nepal cargo is transforming for the better. The Prime Minister of Nepal, KP Oli has recently inaugurated the establishment of Nepal Shipping Office which will open the door for further study and exploration on developing inland waterways in the country. The land-linked country has jumped from 2.38 in 2016 to 2.51 currently on the Logistics Performance Index of World Bank.
Kolkata Port Trust, the pioneer in facilitating movement of Nepal cargo to the global market has introduced electronic cargo tracking system that uses GPS, allowing shippers to keep track of consignments. Further under the transshipment privilege, the containers are directly sent to Birgunj dry port where they can receive customs clearance. Nepal is also receiving transshipment privileges and electronic cargo tracking at Visakhapatnam Port as well, its another gateway on the east coast of India for moving cargo to the third world countries. Electronic locks are being put to containers moving by rail to Nepal, which has also cut a lot of paper work and Customs procedure as containers are carried unopened to Nepal. The trade is finally able to cut down detention and demurrage charges as the turnaround time for containers has come down from 120 days to 14-21 days. Nepal has further sought access to Dhamra and Mundra ports to which Indian government has responded positively.
Improving connectivity to Nepal a new railway line is being constructed connecting Janakpur in south-eastern Nepal to Jay Nagar in Bihar. It is expected to bring down the logistics cost further for Nepal. To meet the demands of growing cargo movement an international dry port is being developed in Chovar, Kirtipur municipality. It will ease congestion in existing dry ports. The Kathmandu – Terai/Madhes Fast Track Road Project will reduce the time for connecting Kathmandu to Terai region from 4 hours to one hour and will also cut the logistics cost for moving commodities. An Outer Ring Road is being planned that connects all the three old cities in the valley with the newly formed municipalities. Of the total length of the Outer Ring Road, 35.08 kilometres will lie in Kathmandu, 15.80 km in Lalitpur and 21.05 km in Bhaktapur.
Prime Minister KP Oli’s government is keen at promoting cargo movement through inland waterways. The terminal being developed at Kalughat in Bihar by IWAI will connect up to Nepal with river Gandak being announced as NW-37. To promote maritime transport, KP Oli recently inaugurated Nepal Ship Office in Ekantakuna just to the south of Kathmandu, near the banks of the Bagmati River. Very soon Nepal flag will be seen sailing in the Indian Ocean.
However, in spite of these infrastructure developments certain issues need to be resolved: need for reducing transit time between Nepal and Indian ports, need to develop better warehousing facilities in Nepal, issues related to tariffs charged by logistics service providers, need for automation of customs and border clearance.
POINTS OF DISCUSSION
- State of roads and border infrastructure
- Dwell time at Kolkata port
- Transport delays of import cargo from Kolkata Port to Kathmandu
- Delays in rail transport.
- Additional costs in handling cargo
- Container tracking at CFS.
- Customs functioning and administrative procedures
- Logistics costs: Having uniform rate of shipping lines, CHA’s, port and CFS
- Bills of Lading procedures in Nepal
- Warehousing infrastructure: Urgent need
- Freight remittances and financial transactions
- Grievance redressal system
- Common testing facilities
- BBIN Status: Cargo booking delays
- Need for more rail connectivity
- Third country cargo transhipment challenges
- Automation and digitalisation
- Connecting to new markets in East, South East Asia and beyond
- Lab and certification facilities