Visakhapatnam overtakes Kolkata in handling Nepal-bound cargoVisakhapatnam pulling Nepali traders with efficiency and higher capacity.
Visakhapatnam port has overtaken Kolkata port in handling Nepal-bound cargo as shipments have exceeded the wagon-loading capacity at Netaji Subhas dock in Kolkata.
Even though Visakhapatnam is located 1,400 km from Birgunj, twice as far as Kolkata, lower sea freight costs from Chinese ports to Visakhapatnam and efficient port handling are compensating for the relatively higher rail freight costs to Birgunj, traders said. Also known as Vizag, India opened the port to Nepali traders in March 2017.
According to Himalayan Terminal which operates Sirsiya Dry Port in Birgunj, 19 railway rakes arrived from Kolkata in April while Vizag sent 20 freight trains during the same period. In May, Kolkata sent 15 rakes and Vizag sent 25. In June, there were 15 freight trains from Kolkata and 32 from Vizag.
The Indian government allowed Nepali importers to use Visakhapatnam port besides Kolkata and Haldia from February 2016. Container shipping liner Maersk delivered the first rake of cargo from Visakhapatnam to Birgunj in Nepal in mid-June 2017.
High detention and demurrage and long container dwell time are the main complaints Nepali importers have against Kolkata port. It takes up to 30 days for importers to return the container to Kolkata, and traders said they had to pay a penalty most of the time.
The delay is primarily due to capacity constraints at Netaji Subhas dock to load containers on cargo trains. While Kolkata port authorities have undertaken a project to increase the capacity, importers are forced to take the costlier road option.
“Nepali importers have been facing a number of problems in Kolkata for a long time, and they have been looking for an alternative. Visakhapatnam port is now ahead of Kolkata port as a result,” said Pradip Kedia, former president of the Birgunj Chamber of Commerce and Industry. “Sooner or later, this was bound to happen.”
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 24 hours a day.
“As the Maersk Line has a monopoly in providing dedicated shipping service to Nepali importers, it has been frequently increasing fees, and that has worried traders,” said Kedia.
Freight forwarders have been asking the government to establish a consulate general’s office in Visakhapatnam like in Kolkata to deal with different issues.
Bishnu Kant Chaudhary, CEO of Himalayan Terminal, said that Maersk Line had a strong hold at Visakhapatnam, and it has been providing time-and cost-efficient services that may have attracted Nepali importers.
“Visakhapatnam now handles 70 percent of the cargo bound for Nepal,” he said, adding that it was the other way around a few months ago. “The changes have been visible from the last six months.” Chaudhary said that Nepal should look for other sea ports as well for trade.
According to Nepal Rastra Bank, Nepal's import bill surged 25.5 percent to Rs1,242.83 billion in the last fiscal year 2017-18. Exports to India accounted for 57.4 percent of total exports.
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