Logistics

Lockdown impact: Slow delivery leading to stockpile of Nepalese cargo

Pratim Ranjan Bose Kolkata | Updated on May 04, 2020 Published on May 04, 2020

Representative image   -  Getty Images/iStockphoto

Exporters to Bangladesh taking sea route from Kolkata

The Container Corporation (CONCOR)-run dry port at Birgunj in Nepal nowadays spends more time arranging boxes. As against a storage capacity of 1,500 containers of 20 ft each, the port has built a stockpile of 4,000 boxes, as importers in Nepal are barely taking deliveries.

The dry port is the delivery point of third-country imports in Nepal though the Kolkata and Vizag ports. As the Birgunj container depot ran out of capacity, Kolkata and Vizag together developed a stockpile of nearly 6,000 boxes, which will take over 60 railway rakes to be cleared.

The Railways is losing too. According to CONCOR sources, at least seven rakes returned empty from Birgunj. Nepal barely has any exportable cargo. Normally rakes collect empty containers on return.

Truck availability

The Covid-19 pandemic and the extended lockdown has taken a heavy toll on trade across the subcontinent, but things have been particularly difficult for Nepal, where the truck movement is down to roughly 10 per cent of the pre-Covid period.

“Non-availability of trucks and labour at Birgunj are major reasons behind the slow movement of cargo. Also, with factories and distribution outlets closed, people are not making any extra effort to take deliveries,” said a Nepalese importer.

The slow movement of cargo is also hurting those who want deliveries. One such importer had to wait for 1.5 months to take delivery of three boxes. Customs authorities in both India and Nepal are adding to the hindrances by rejecting clearance of boxes carrying multiple items.

Special window

The stockpile is not costing users at this juncture, as shipping lines and ports relaxed penal provisions for delay in returning empties or lifting cargo during the lockdown period. The benefits are accrued by Indian importers as well.

However, ports have taken a more considerate view on Nepal.

“We have a stockpile of nearly 3,000 Nepal-bound boxes. While the ground rents are waived for all users during the lockdown period, for Nepal we may offer the window for 15-odd more days after lockdown is lifted,” said Vinit Kumar, chairman of Kolkata Port Trust.

Interestingly, the lockdown failed to impact KoPT operations significantly. Kumar said the Haldia dock system is operating at 80-90 per cent capacity, while the Kolkata Dock system — that mainly deals with containerised cargo — is operating at 80 per cent.

Sea route to Bangladesh

While the cargoes arriving at the port were mostly booked before the lockdown, there are early indications of export push for select segments in the days to come.

According to Sailesh Chakraborty, a logistics consultant in Kolkata, with the demand potential in domestic market remaining low, sectors like iron ore and steel are aggressively looking at export opportunities. KoPT chairman has also confirmed this view.

Private iron ore miners are taking a lead in tapping export opportunities, mostly to China. Steel makers are reportedly looking at wider market opportunities, including in the neighbourhood.

The initiative has brought about at least one positive change in neighbourhood trade logistics. Since land border movement between India and Bangladesh is disrupted by the pandemic, steel exporters are taking the sea route from Kolkata to Bangladesh.

Though theoretically, sea freight is always cheaper, rampant overloading makes road freight competitive in the eastern region. The balance may tilt away from land movement in the post-Covid period, due to variety of reasons.

Published on May 04, 2020
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