The domestic, EXIM and transhipment cargo moving from the hinterland is on the rise, but various infrastructure bottlenecks have not allowed the trade to flourish upto its potential. The industry discussed various inherent and man-made barriers that can be eradicated to allow free-flow of cargo movement in the region
At the beginning of the Business Session 2, Neeraj Varma, Superitendent, Kolkata Customs Commissionerate, read out a note from Manish Chandra, Commissioner of Customs (Port), highlighting various pro-trade initiatives carried out by the department.
Speakers for the Business Session 2 were S Balaji Arun Kumar, IRTS, Deputy Chairman, Kolkata Port Trust; Ashok K. Temani, Chairperson, Road Transport & Transit Committee, The Federation of Nepalese Chambers of Commerce and Industry (FNCCI); Adithya Manimaran, Regional Sales Manager – East India, Nepal & Bhutan, Maerskline India; Ashutosh Jaiswal, President(International Business Division & Logistics), Century Plyboards; Gaurav Sengupta, GM, CMA CGM Agencies; and the session was moderated by Sushil Mulchandani, COO, Visakha Container Terminal. The session started with the address by moderator Sushil Mulchandani. The session was focussed on interaction between shippers and service providers. Mulchandani apprised the delegates about Visakha Container Terminal, its infrastructure, and various futuristic initiatives taken by the terminal to serve the trade in the hinterland.
S Balaji Arun Kumar: There are challenges in cargo movement from Kolkata Dock, and investment has been made on railway infrastructure to ease out congestion. Another investment is being done to make railway lines at the port full rake load compliant. All these efforts will speed up evacuation process from Kolkata. Kharagpur railway division has not been able to meet the demand at Haldia. On the contrary Sealdah railway division has been able to provide adequate rakes at Kolkata. Improvement of rail infrastructure will also facilitate Nepal bound bulk cargo from Kolkata.
There are discussion with Kolkata Police to allow 24X7 cargo movement between CFS and the dock. Road transporters should exercise discipline while plying to and from the port and should not hinder city traffic. In a bid to bring down turnaround time, different efficiency improvement measures have been established. Among others, a dry port is being developed at Balagarh with an investment of `350 cr which will contribute to movement of barges avoiding congested roads of Kolkata, and will cater to north Bengal, Jharkhand, Bihar, and north east.
Ashok Kumar Temani: Due to some issues in Kolkata, traders in Nepal are looking at other ports. Kolkata Port should charge all fees directly from shippers instead of intermediaries, and online payment gateway should be strengthened to allow traders in Nepal to make digital payment, which would bring transparency and if the payment and reimbursement could be facilitated through Nepalese Banks recognised in India, it would immensely benefit the trade in Nepal.
Haldia Port should also be offered as an alternative for Nepal bound containerised cargo. Currently Haldia is focusing more on bulk. Nepal trade faces detention and demurrage throughout the year. Currently about 40 container rakes move for Nepal in a month, but CONCOR is the only rail operator from India. Shipping Lines should also consider to open offices in Nepal which would allow faster resolution of cargo transit issues with the shipper. Exporters also face scarcity of empties at Birgunj due to which they fail to meet the time commitment made to clients. There is also scope for private CFS operators in Nepal. Due to bad road condition from Kolkata to Nepal, especially the stretch passing through Bihar, the trade had to pay lot of detention charges. There is also need for facilitation centres to resolve trade disputes. There is no modality for LCL cargo in Kolkata and those available are expensive. There is also no platform available for Indo-Nepal trade-transit issues, and platforms like SLS are extremely helpful for traders.
Adithya Manimaran: There are many issues that have increased inventory cost for the consignees. Consignees who on an average maintain 15-20 days of inventory stock round the year, during festival and other peak time they would increase their inventory to an excess of 1 month to avoid any shortage of cargo as they are aware of various logistics issues in the region. From transhipment point of view during peak demand days such as Q1 and Q4 of the year, containers wait at transhipment ports Singapore and Colombo. After the introduction of transhipment at Krishnapatnam Port in 2016, and also at Visakhapatnam, the delays could be reduced by couple of days subsequently the waiting time.
Maersk Line started serving Birgunj about 4 years ago to improve the situation for Nepal but it didn’t help much, and the line tried to find solution via Haldia Dock but it failed due to operational and process challenges. Trade in Nepal also pay huge detention charges, moreover they had to deal with about 5-6 vendors to tranship container through India. Automation of process could eliminate all these hassles. Overall Nepal market is growing at an average 15 per cent, and majority of this is triggered by higher import but export is stagnant. The line started serving Nepal trade from Visakha Container Terminal offering them one stop model, and it was one rake in June 2017 which has grown to 13 rakes per month in January-February 2018. Similarly from Kolkata rake movement for Nepal has grown to 35 rakes per month. The line will introduce its presence in Nepal sometime in the later half of the year.
The liner in co-operation with other stake holders like CONCOR is also working on to release a scheduled time table. Maersk Line looks to integrate the entire logistics supply chain, automate processes, and to capitalise on opportunity to digitalise. Kolkata offers an opportunity to use the space available with CFS present near the port. Kolkata has registered growth in import but export has been stagnant. The lines require an additional berth for evacuation. The north east India market is growing and now it needs more ICDs. Inland waterways also open up lot of scope for trade growth with Bangladesh, especially Pangaon is a key port for EXIM growth.
Gaurav Sengupta: Many times shippers rue that 21 days of detention free time is not enough for the Kolkata-Nepal trade route. In a bid to understand the actual challenges faced by the trade while moving cargo from Kolkata Port to Nepal, and it was also a part of a cost analysis study on Kolkata Port catering to the Nepal trade, a team from CMA CGM recently travelled by road from Patna to Kathmandu via Birgunj, and realised that the road condition is extremely poor for cargo movement.
The shipping lines should not be held responsible for detention which is caused due to lack of road infrastructure. ICD Birgunj has enough space but it lacks in equipment. The road condition from ICD Birgunj to Kathmandu is also extremely pitiable. Some of the Nepal trade facilitation measures by CMA CGM are offering 21 days free time at ICD Birgunj along with empty drop off and boxes are on offer at the ICD for export stuffing. There is a need to introspect the charges levied by Kolkata Port on various services. CMA CGM runs two vessels to Kolkata Port, and though it is claimed that the waiting time is 4.6 days but the actual waiting time runs to an excess of 7 days. Due to the inordinate delays at Kolkata Port, the vessels running between Singapore and Kolkata have to skip the call at Port Klang. There is an imbalance of cargo at Haldia and the port has more exports, due to which the line doesn’t call the port. The Nepal cargo going to Vizag is one of the eye-opener for all stake holders in Kolkata who collectively need to introspect the reasons and fulfil the need of the trade.
Ashutosh Jaiswal: For many years Kolkata Port has been written off but it is still going strong. Century entered into the sector as an importer and exporters, but soon realised the EXIM community is not being served well by the logistics service providers. In a bid to tap the opportunity, the company entered into CFS sector. Now the company is also into shipping segment with about 15 vessels under charter. Century entered into CFS operation at a time when Kolkata Port had a throughput of 2,63,000 TEUs/annum and there were only two CFSes in operation. There was need for CFS capacity addition in the region, and the CFS turned around within 3 months because as a shipper the company was aware of various difficulties faced by the trade. The company brought in reliability and transparency to eradicate various unsolicited tariffs charged earlier.
Now Kolkata Port alone has an annual throughput of 6,00,035 TEUs, and CFSes in the region have a major contribution to the growth. CFS should be considered as a facilitator to the trade. In the coming 3-5 years Kolkata’s throughput will increase to 8,50,000 TEUs. DPD wouldn’t impact CFS model at city-based ports. CFSes need to look at value addition, innovation, technology, digitalisation, etc to their service offering to sustain in the business.
