Use of shipping lines cuts costs for traders

- POST REPORT, Kathmandu

May 30, 2014-

A number of foreign shipping companies have started showing interest in transporting containers containing imported goods from Kolkata port, India to the Inland Container Depot (ICD) in Sirsiya, Birgunj. Hiring shipping companies is expected to reduce the cost of transporting import and export cargo.

Recently, Maersk Line, a Danish vessel operator, has started ferrying goods imported from third countries to the ICD. Two other companies including European Liner and American President Lines are getting ready to transport containers to the ICD, said Himalayan Terminal which manages the dry port.

RB Rauniyar, director at Himalayan Terminal, said they had been accepting invoices of the Maersk Line since the last few weeks.

These companies have offered their services at a time when there is increased traffic of containers at the ICD. Presently, it has been handling 40-45 wagons (90 containers) that arrive every other day. Compared to a decade ago when the ICD started operations, container traffic has swelled 452 times, according to the Nepal Intermodal Transport Development Board (NITDB).

The entry of the foreign shipping companies, according to Rauniyar, will reduce the transportation cost for Nepali traders. By using their services, importers will have to pay the charge for using the containers only until the goods are unloaded at the ICD. “From the day we issue the cut off bills, it becomes the liability of the shipping companies to deliver the empty containers back to Kolkata port.”

Earlier, importers had to pay the cost of dispatching the empty containers back to Kolkata. “This two-way container detention charge has now been reduced to just one-way,” said Rauniyar.

Apart from reducing the cost for two-way traffic, the new provision is also expected to minimise demurrage, the fee that importers have to pay to service providers for delayed consignments.

According to the NITDB, a container normally takes 28 days to arrive at the ICD from Kolkata port. In addition to the normal duration, importers are given a grace period of two weeks when there is no extra charge. However, if any container takes longer than that, traders have to bear the extra cost.

The NITDB’s Executive Director Sarad Bikram Rana said that traders had been paying billions of rupees annually in demurrage and freight charges to send the empty containers back to Kolkata port. Traders encounter delivery delays a number of times annually due to many reasons including construction work in India and labour strikes at Kolkata port.  “Now the traders are not affected by such unfavourable situations.”

Rana said the provision of using shipping lines for transporting imported goods was just a short-run solution to reducing the cost of imports. He sought effective implementation of the transhipment provision that the Indian government has agreed in principle during the bilateral talks held in December.

The dry port accounts for a major share of the country’s total customs revenue. An estimated 65 percent of Nepal’s imports from third countries comes through the Birgunj ICD. According to the NITDB, the government has been receiving a minimum rental of Rs 75 million annually.

Rana resigns

KATHMANDU: The Nepal Intermodal Transport Development Board’s Executive Director Sarad Bikram Rana resigned from his position on Friday. Rana declined to say why he quit. (PR)

Published: 31-05-2014 09:29

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