December 1: The government has become a mute spectator to the hegemony of shipping companies involved in supplying cargoes to Nepal via third countries. The overseas cargo companies providing services in Nepal are yet to get registered in the country. Those companies have been operating in Nepal just because they have been registered in neighbouring India.
As the cargo companies are not registered in Nepal, they have been charging the local importers exorbitantly high fares for their services. Nepali importers say that the government has become a mute spectator to the extortion of foreign shipping companies.
Government authorities easily avoid this topic saying that the foreign companies are not registered in Nepal.
Although Nepal and India had jointly implemented transshipment model for transport of goods through Indian ports with the objective of reducing the transshipment cost, this has had very little impact on the monopoly of the shipping companies.
Earlier, the importers had been claiming that they have had to incur huge cost due to the charges of customs house agents. But now, they claim that the cost has not reduced because of the arbitrary charges fixed by the shipping companies.
Treasurer of Nepal Freight Forward Association Naresh Agrawal says that although there has been some improvements in the process of customs clearance, the conduct of shipping companies has not changed.
It is estimated that the transportation cost of landlocked countries worldwide is 20 percent more than the countries that have access to sea ports. However, Nepali importers say that they have to bear 40 percent additional transportation cost.
Another importer Pradeep Kedia says that the excessive transportation cost prevented them from benefitting from competitive market.
The transshipment model has reduced the paperwork but has increased the overall transportation charge.
“It is because the shipping companies have been charging fares on electronic cargo tracking system under the transshipment model as per their will,” said Kedia.
Other importers say that the transportation cost has increased by 50 percent after the responsibility of transshipment was taken by the shipping companies.
“Earlier, it was the customs house agents who had been charging high fare. But now, the shipping companies are taking the advantage. It’s like jumping from the frying pan into the fire,” said Kedia.
Currently, 21 shipping companies are operating in Nepal. But none of them fall under the purview of law. These companies are operating in the country without registration.
The annual transportation cost for overseas trade is estimated to be around Rs 250 billion. Shipping companies are taking advantage of operating their business in Nepal without being registered here.
The government can only control the companies that are registered and had pledged to make a separate law for the shipping companies. But there hasn’t been any progress to this end.