NEFFA explores alternatives to minimise losses faced by Nepali traders
Kathmandu, January 9
Nepal Freight Forwarders’ Association (NEFFA) — the umbrella organisation of freight forwarding companies in the country — has approached United Nations organisations and diplomatic missions based in Kathmandu to facilitate Nepali traders who are in a difficult spot due to the prolonged border blockade.
Nepali traders are having to bear additional costs in trade due to high demurrage and detention charges levied by shipping liners due to the border blockade, which has hampered free flow of goods from India to the country since the third week of September. NEFFA is seeking exemption of such additional costs accrued due to ongoing difficulties in the movement of vehicles.
NEFFA has approached the International Trade Centre (ITC), United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and International Maritime Organisation (IMO) for exemption of such demurrage and detention charges levied by the shipping liners.
Shipping liners normally extend a grace period of 14 to 35 days to return the containers to Kolkata port once the Nepal-bound cargoes are released from the port. The port is the only gateway of Nepal for third country trade.
Similarly, the port extends a grace period of 10 and 20 days to release the cargoes ferried via road and rail, respectively. After the grace period is over, shipping liners charge $80 to $120 per day till the date they receive the containers.
After the grace period expires and if the containers remain stranded at the port, the authority sends the Nepal-bound cargoes to the yard of private container freight stations (CFS), for which the traders have to pay high rent for CFS and demurrage for shipping liners.
Nepal-bound cargoes started piling up at the yard of private CFS as the traders and freight forwarders were unable to return the containers in a timely manner due to the border blockade. Likewise, as the shipping line containers unloaded at Inland Clearance Depot in the country and other destinations were detained for long due to the blockade of vehicular movement, the dentition charge also went up significantly.
NEFFA has said that such extra costs accrued due to the blockade have already exceeded INR six
According to NEFFA President Rajan Sharma, the association has approached ITC and UNESCAP, who are working in Nepal for trade facilitation. Similarly, NEFFA has also written to IMO, which is the UN’s specialised agency responsible for improving maritime safety, to inform them about the difficult situation the country is facing.
“We have informed the UN agencies about the problems being faced by Nepali traders,” said Sharma, “We are hopeful that they will help us in identifying the best way to tackle such problems.”
In addition, a joint delegation of the Federation of Nepalese Chambers of Commerce and Industry and NEFFA has started holding meetings with the diplomatic missions of the respective country of origin of the shipping liners. The delegation has reportedly also requested the mission heads to hold discussions with the shipping liners to exempt the demurrage and detention charges.
The delegation had recently met South Korean Ambassador to Nepal Choe Yong-Jin to request him to take the initiative to exempt the demurrage levied by South Korean shipping company, Hanjin Shipping. In the meeting, Ambassador Jin told the delegation that although he would do his best, the final decision lay in the hands of the private companies.
The delegation is soon scheduled to meet the ambassadors of Denmark, France and the US and make similar requests.
In the meeting, the private sector delegation will also draw the attention regarding the request of the Nepal government. The Ministry of Foreign Affairs had circulated a letter on Monday to the diplomatic missions based in Kathmandu to take up the matter with concerned authorities in their respective countries for the exemption of such demurrage and detention charges payable by the Nepali importers and exporters to the concerned shipping lines.