Nepalese importers haul vessels to Vizag port as Kolkata proves costlier

After over 30 per cent growth in 2015-16, rail movement of $3-billion-worth transit cargo recorded a slower 15 per cent growth in 2016-17 Nepalese financial year (July-July), reportedly due to the constraints in wagon-loading capacity at Netaji Subhash dock in Kolkata port.

While movement of cargo from Visakhapatnam port has just started, Nepalese traders expect it to gain momentum, sooner than later, due to both cost and time advantages over Kolkata port.

“Container shipping liner Maersk delivered the first rake (a cargo train) of cargo from Visakhapatnam to Birgunj in Nepal in mid-June. They are expected to bring the second rake in the third week of July,” an importer in Nepal told BusinessLine .

Though the distance to Birgunj from Visakhapatnam is double that from Kolkata, a lower sea freight between Chinese ports and Visakhapatnam, and efficient port-handling is compensating the relatively higher rail freight from Visakhapatnam to Birgunj.

Unlike the river port in Kolkata that can accommodate only small daughter vessels, Visakhapatnam is a deep-water sea port where large container ships can unload cargo 12-24 hours.

To make the deal even better, Maersk starts the counter for the normative 14-day window to return the empties, five days after the import cargo reaches Birgunj.

“Operations through Visakhapatnam are proving to be both time- and cost-efficient. Detention and demurrage charges are zero,” said Ashok Temani, an importer and Chairman of the Trade and Transit Committee of Nepalese apex chamber, Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

High detention and demurrage are the prime complaints of Nepalese importers against the Kolkata port. According to Temani, it takes up to 30 days for importers to return the container to Kolkata, attracting penalty.

The delay is primarily due to capacity constraint at Netaji Subhash dock to load containers to cargo trains. While Kolkata Port authorities have undertaken a project to increase the capacity, importers are forced to take the costlier road option.

Unlike the Maersk offer for Visakhapatnam cargo, no shipping liner offers extended detention window for containers arriving at Kolkata. Sources blame it on poor working conditions and a strong grip of political syndicates, adding to the overall cost structure.

According to Temani, this, coupled with refusal of Indian customs authorities to open a second loading point outside the port, is adding to the misery of the Nepalese importers. They cannot use facilities at the Haldia dock complex due to the absence of consular services there.

The monopoly granted by Nepal to Indian government-owned Container Corporation in running container freight and dry port services is further preventing the entry of top global logistics firms that offer end-to-end services.

Meanwhile, transit operations have come under the scanner of customs authorities of both India and Nepal following the unearthing of a fraud. According to unofficial sources, before Maersk could deliver the first batch of cargoes, a container unloaded in Visakhapatnam reportedly made its way to Birgunj by road.

In a knee-jerk reaction, the customs authorities of both the countries imposed new set of restrictions and administrative barriers, which is apparently adding to the existing trade issues.

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