September 6: Due to the landlocked nature of Nepal, it is estimated that the transshipment cost of Nepal is up to 20 percent higher than other countries. While the coastal countries limit the cost of transshipment between 5 to 10 percent of the total trade costs, it costs up to 25 percent in Nepal’s foreign trade. Efforts to reduce the cost have not been effective so far.

Ashok Kumar Temani, chairman of Transport and Transit Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), say that foreign trade has not become competitive due to the high transshipment cost.

“The transshipment cost in countries linked with ocean is 5 to 10 percent of the total trade cost. But, it costs up to a quarter in our country,” he told New Business Age.

Temani believes that the foreign trade has become expensive and lags behind in competition due to the inability to reduce the transportation costs. Under normal circumstances, the cost is around 25 percent in average, and sometimes goes up to 40 percent. That is one of the reasons why Nepalese products are not been able to compete in the international market.

Recently, some importers have paid double fare than that of the price of goods. Due to the government decision and procedural delay, the containers carrying peas are stuck in the dry port of Birgunj and now have to pay twice more fare and fine than the price of the goods. Importer Om Prakash Moore says that they have to pay Rs 2.4 million including holding charge and fare for a container of peas which actually costs Rs 1.2 million only.