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.

RSA revision to allow private Indian railway ferry good to Nepal

Nepal and India will revisit a decade-and-a-half-old Rail Service Agreement (RSA) that is expected to allow private Indian railways to ferry goods to Nepal.
The two-day bilateral meeting to start from tomorrow in New Delhi will discuss around a dozen of issues including RSA, as the decade old agreement could not address the issues related to bilateral trade on the current times.
The joint secretary-level talks between the two countries will also review transit pact that will allow Nepal to use Indian sea ports closer to major customs points of western and far-western Nepal –Bhairahawa, Nepalgunj and Dhangadi – for third-country trade. Ferrying Nepal-bound freight via inland waterways will also be included in the transit treaty, according to the Nepali officials visiting New Delhi to take part in the meeting. “The Delhi meeting will discuss the extension of the service of containerised and bulk cargo, ways of utilising the extension of the Janakpur-Jaynagar railway for transit and railway links both metre and broad gauge.
With the increase in trade and transit with third countries, Nepali traders have been demanding an extension of railway services in all the trading points across Nepal but the 2004 RSA includes only the railway transit facility from Kolkata to Birgunj. The traders have also been requesting to extend the bulk cargo facility to other important transit points between Nepal and India.
According to joint secretary at the Ministry of Industries, Commerce and Supplies, who is leading the Nepali side, Nawaraj Dhakal, “Nepal is compelled to bring all the commodities imported from third countries via Kolkata to Visakhapatnam Port through Birgunj in the absence of bulk cargo facilities in other transit points.”
Nepal and India – last year in Kathmandu during the BIMSTEC summit – also held talks about the signing of the Letter of Exchange (LoE) regarding bulk cargo during the BIMSTEC summit in Kathmandu but failed to do so in the last minute.
“The talks in Delhi tomorrow will also focus on permitting Indian private rail operators to transport Nepal-bound cargo from Visakhapatnam and Kolkata ports to Nepal,” he said, adding that the bilateral meeting will focus on opening of other integrated check points like Bhairahawa, Biratnagar, Nepalgunj and Janakpur and giving access to Nepali and Indian railway companies to transport Nepal-bound cargo.
“Nepali traders are paying more money to CONCOR, as it has monopoly in transporting cargo services to Nepal,” according to Nepali traders, who have also been demanding to extend this facility to other transit points because it is increasing the cost of raw materials and decline in the competitiveness of domestic products.
At present, state-owned CONCOR has the monopoly in transporting Nepal-bound cargo. “But Indian private railway companies have pledged to provide their service at around 25 per cent to 30 per cent cheaper rate compared to CONCOR, if given the opportunity,” according to the traders. The amendment of RSA will pave the way for operationalisation of private railways to ferry Nepal-bound cargo from Indian ports to respective Nepali inland clearance depots.
“There is also a possibility of discussion on the implementation of an Electronic Cargo Tracking (ECT) System, which is currently in a testing phase,” Dhakal said, adding that there may also be talks on extending this system to other transit points.
Nepal and India had signed the RSA in 2004, which is obsolete. Though an extensive evaluation of the agreement had come time and again, Nepal and India held only two meetings – in 2009 and 2012 – since the signing of the agreement, but they could not come out with any conclusion.
Apart from RSA, both the countries will also discuss on amending Trade Treaty and Transit Treaty between the two countries on a reciprocal basis.
The Indian side has however requested extension of Export Import (EXIM) code for Indian nationals trading with businesses in Nepal and expressed concerns over protection of intellectual property of Indian products. The Indian side has also requested Nepal to remove duties and related charges on import of agricultural commodities from India.

Makalu aircraft crashes

Both the pilot and the co-pilot on board were killed after a cargo aircraft of the Makalu Airlines crashed today morning at the Bahun Kharka in Humla.
The plane was flying at a height of 12,800 feet. The single-engine Cessna 208B Grand Caravan with call sign 9N-AJU had taken off from Surkhet to Humla district headquarters Simikot. It took off from Surkhet Airport at 6:12 am and was scheduled to land at 6:55 am in Simikot. But the plane had gone missing minutes before landing at the Humla airport.
The crashed aircraft was discovered nearly four hours later. According to deputy director general at Civil Aviation Authority of Nepal (CAAN) Rajan Pokharel, the Makalu Air cargo aircraft crashed at Simikot Pass in Bahun Kharka, Humla. He said both pilot Kiran Bhattarai and co-pilot Aditya Nepali died in the crash.
Humla is one of the remotest districts in Karnali province. The district is accessible only by small aircraft.
The bodies will be airlifted to Kathmandu, an airport official said, adding that an investigation would be soon launched.
Makalu Air has three single-engine Cessna 208B Grand Caravan aircrafts to its fleet. Based in Nepalgunj, Makalu Air provides chartered passenger and cargo services.
The crash – nearly two months after a US-Bangla aircraft crashed in the Tribhuvan International Airport (TIA) killing 51 people and injuring over a dozen – once again reminded the authorities need to improve the safety of Nepali sky.