Government starts operation of its own CFS in Kolkata

Minister of Industry, Commerce and Supplies Matrika Prasad Yadav today inaugurated the container freight station (CFS) built by Nepal at Kolkata dry port in India. The CFS came into operation from today itself.
The private sector has expressed its gratitude towards the government for operating its own CFS, according to a press note issued by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today. FNCCI vice president Kishor Kumar Pradhan also participated in the inauguration ceremony of the CFS. Other high ranking officials from the Ministry of Industry, Commerce and Supplies and Kolkata dry port and other Nepali stakeholders also took part in the inauguration ceremony, the FNCCI press note reads, adding that CFS is a warehouse, where goods carrying vehicles are kept to complete the legal process of import and export. “This initiative of the government will reduce the extra charges that Nepali traders have been paying for the import and export of goods via Kolkata dry port.”
The FNCCI had been requesting the government for this facility since long,” the press note reads, adding that the government has finally brought its own CFS into operation and FNCCI believes that this initiative will provide some respite to Nepali traders. “With the government’s own CFS, Nepali traders can now store their cargo containers at a cheaper rate.”
The statement adds that the CFS has the capacity to store around 500 containers.
Kolkata dry port was charging Rs 45 to Rs 65 Indian Currency (IC) per tonne per day from Nepali importers. However, after the operation of the Nepal government-owned container freight station (CFS), Nepali importers can now store their goods at half the amount, the press note adds.
Earlier, the government had launched the electronic cargo tracking system on February 15 to clear cargo vehicles coming via Kolkata dry port.

New cargo tracking system increased freight forwarders’ cost

Freight forwarders today complained that the electronic cargo tracking system has raised transportation costs by 25 per cent despite minimising documentation costs also due to reduction of transportation time, detention and demurrage charges for Nepali traders.
“Despite government’s assurances that the new system will make shipping cheaper due to reduction of transportation time to almost four times, the shipping companies at Indian ports have been imposing additional surcharges under different headings increasing the cost against the government’s claim, they complained.
The government has recently launched the electronic tracking that uses the Global Positioning System (GPS) – a satellite-based radio navigation system – and allows the shipper to keep track of consignments. Nepal has received transshipment privileges from Indian authorities – along with the system – under which goods imported from third countries undergo customs clearance directly at the customs points on the Nepal-India border.
The government has been implementing the electronic tracking and the transshipment on Nepal-bound cargo released from Kolkata, Haldiya and Visakhapatnam ports in India since mid-February. The system permits electronic documentation that has been claimed to make shipping cheaper apart from reducing time of transportation to five days from earlier 21 days, saving demurrage and detention charges.
The traders – to use the system – need to pay Rs 4,200 extra per container as fitting charge for electronic tracking device. However, the freight forwarders complained that they are forced to pay higher consignment charges. “Shipping companies hiked the cost of cargo handling by Rs 25,000 to Rs 125,000 from Rs 100,000 per container,” according to past president of Nepal Freight Forwarders Association (NFFA) Rajan Sharma. “Shipping lines give only a four-day concession period for empty containers to be returned from Birgunj to Kolkata after they are unloaded,” he said, adding that the companies charge an additional $100 per container per day, if there are delays. “The limited capacity of Sirsiya Dry Port in Birgunj to handle containers has pushed the costs up.”
Apart from congestion at Sirsiya Dry Port in Birgunj, the rising labour cost and the need to train manpower at the ports have also contributed to the hike in the price, according to the incumbent president of the association Prakash Singh Karki.
Karki also suspected intervention of customs agents behind the hike in freight charges. “When the system was launched in February, customs handling agents at Indian ports had disrupted the movement of Nepal-bound cargo,” he said, adding that they used to earn by using the manual system but upset by the loss of income, the agents protested by halting the movement of Nepal-bound cargo.
Currently, six shipping lines are providing services to Nepali traders. Among them, Maersk Line handles around 60 per cent of the cargo destined for Nepal. The small number of companies handling Nepal-bound cargo is also one of the reasons for increasing the cost due to the monopoly.
The association has suggested the government to use more shipping companies to check such malpractices.