\
18 Jul

Tackling cargo movement from India

The Nepal-bound containers that are shipped from the Kolkata Port, in India, have been facing a number of problems at the Indian port. Delay in clearance, lengthy documentation procedures and a lack of timely availability of rakes are the key problems identified by Nepali traders that has made trading costs significantly high. The Kolkata Port receives around 400-600 Nepal-bound containers every week.

The Nepal-bound containers that are shipped from the Kolkata Port, in India, have been facing a number of problems at the Indian port. Delay in clearance, lengthy documentation procedures and a lack of timely availability of rakes are the key problems identified by Nepali traders that has made trading costs significantly high. The Kolkata Port receives around 400-600 Nepal-bound containers every week. Of these, only around 335 containers arrive at the Dry Port in Sirsiya, Birgunj. This delay in movement of Nepal-bound containers has been compelling importers to pay demurrage charges, which has pushed logistics costs. The Container Corporation of India (Concor), an undertaking of the Indian government, operates the railway service at the Kolkata Port that facilitates the transfer of consignments to and from Nepal. The company also holds major stake at Himalayan Terminal Private Limited (HTPL), the operator of inland container depot (ICD) in Birgunj. Rajesh Khanal of The Kathmandu Post caught up with V Kalyana Rama, chairman and managing director of Concor, to talk about the issues that traders have been facing on transporting the consignments from the Kolkata Port to the Birgunj Dry Port. Excerpts:


What is the purpose of your Nepal visit?
I have come to Nepal to meet the various stakeholders of the cargo movement, and to hold one-on-one conversations with them. Nepal is one of our clients, and we want to solve all the existing issues that are there with the transporting of cargo containers from Kolkata to Birgunj. The main reason behind my visit is to understand the situation here, and try and find solutions for problems.


What is the role of Concor in Nepal?
The cargo movement is being carried out as per the Nepal-India Trade and Transit Treaty, where the goods imported from third-world countries arrive at the Kolkata Port. From there, we send the goods to the Birgunj ICD, which is operated by HTPL, an entity owned by the Nepal government and one of our partners. Our role is to ease this cargo movement with our expertise.


Has Concor considered taking any measures, such as increasing railway rakes, to ease the Nepali cargo movement?
Concor’s focus is on increasing its range of services. Compared to last year, our railway trips have increased by 15 trips per month. For example, if we were doing around 28 rakes a month last year, this year, we are moving 43 rakes a month. We are ready to take on 60 rakes a month, but for that to happen, some improvements should be made from Nepal’s side as well. We are ready to provide whatever is necessary from our side, including more rakes.
HTPL is also ready to offer quick service. The main thing we have to focus on is to ease the Nepali cargo movement, and to clear the cargo that arrives at Birgunj ICD on time. Cargos have to move fast. Only increasing train movement will not help.


Nepali Freight Forwarders often blame Concor for not co-operating with the traders when it comes to Nepal-bound cargo. What is your say on this?
The whole process is a chain, and if something gets stuck at any point, the whole system gets affected. We need to understand where the chain is being broken, inform people about the obstruction and ask the concerned people to clear the obstruction. Blaming each other will lead us nowhere.
If there is any ‘created’ delay, then we will instruct our officials to address the issues. A rake comes with 90 containers, which means 90 empty containers return to Kolkata. If we do not receive empty containers, then the rake cannot move further. Right now, on average, 1.4 rakes come to Nepal daily. We could change this and transport two rakes daily (which could transport 180 containers), but we would be getting 120 empty containers daily from Nepal, which will not help anyone.
Concor, the Kolkota Indian port, Nepal’s Birgunj port, Nepal’s customs, the Government of Nepal-all are stakeholders. If everybody works together, everyone will benefit.


Concor often sends Nepal-bound cargo to CTKR, an additional point of Concor, for clearance. But traders are concerned that the provision has raised trading costs. What are your thoughts on this?
The Kolkata Port only has one loading point, from where we can send only one rake a day. So we need to send the containers to CTKR, which is just two km from the port. For quality service, some additional cost is obvious. We take additional IRs1,300 per container to provide our services at CTKR. Rather than leaving rakes idle for 6-7 days (which will be hit with detention charge) at the seaport, it is better to pay some amount of nominal charge while using the additional point. This will help reduce the entire cargo trip cost.

 


What are the major roadblocks on this trading route?
Infrastructure is perhaps one of the biggest roadblocks. Nepali traders and freight forwarders often complain that Concor is monopolising the entire business. And they think that if the private sector were to step into the market, many existing problems would disappear. But will it?


Concor is robust enough to provide more rakes and other related services. Our 22 rakes can easily pull off four trips per month. Currently, we have been able to conduct 44 trips, although our potential is 73 trips. If operators ask for more, we are ready to provide more. Traders in Nepal mainly go for arbitrage, that’s why there is delay in clearance from Birgunj ICD. These practices have to be streamlined properly, and then these problems could well be taken care of.


Why are you reluctant to increase infrastructural facility at HTPL in Birgunj ICD?
A single forklift at the Dry Port clears 80-90 containers at a time. But, an average of 30 containers gets stuck at ICD. If it is needed, we are ready to increase the number of forklifts operated by HTPL. A forklift comes at the cost of only IRs700,000-800,000. Increasing the number of forklifts is not a big deal.


Lastly, in your opinion, how can we solve the ongoing problem of cargo movement?
To solve this problem, we can invite officials from the Nepal Chamber of Commerce, prominent Nepali traders, freight forwarders and all other concerned authorities to sit and talk to solve the raging issues together. However, having said that, we cannot change the system, particularly firm systems such as the advance freight payment system. But we are ready to provide additional help, if concerned persons come up with concrete agendas.