Freight forwarders in Nepal have been facilitating international trade since as early as mid-1950s, with the opening of the first highway linking Kathmandu with the Indian border city of Raxaul. They deliver goods from door to door in a fast and cost-effective manner and take care of all the necessary documents required by international shipping lines. About 105 such freight forwarders in the country are affiliated with Nepal Freight Forwarders´ Association (NEFFA), the apex body of freight forwarders in the country. [break]
The sector directly employs 3,000 to 5,000 people and indirectly employs more than 100,000 people, according to NEFFA.
Freight forwarding sector has seen massive improvements in the way services are provided due to modernization, well-equipped warehouses and improvements in information technology.
They have become successful in creating a world wide network through which they can easily coordinate with freight forwarders in other countries for the smooth movement of goods.
The country has Inland Clearance Depots, also known as dry ports, in major bordering towns like Birgunj (rail-based), Biratnagar, Bhairahawa and Kakarbhitta. Dry ports are inland inter-modal terminal connected to seaport by road or rail. They operate as a center for the trans-shipment of sea cargo to inland destinations.
One of the big impediments in the sector has been the decline in exports. As the freight forwarding industry is directly dependent on exports, the decline in exports directly affect this industry.
According to Trade and Export Promotion Center under the Ministry of Commerce and Supplies, exports in the first eight months of the current fiscal year decreased by almost 7 percent, compared to the figures of same period last year.
Carpet, readymade garments, handicraft, traditional cotton and woolen garments and goods and silver jewelry are some of the top exportable commodities handled by Nepali freight forwarders.
Garment exports have declined by almost 90 percent in the last five years after World Trade Organization´s Multi-Fibre Agreement expired in 2004. The export of carpet at present is half of what it used to be two years ago.
“The sustenance of this industry depends on exports. The government should facilitate and give additional incentive for exports,” said Rajendra Sangraula, secretary of NEFFA.
Another big challenge in the sector is that India has yet to give sea passage to Nepali freight forwarders according to the international norm. So far, they are allowed to use a port in Kolkata which is highly congested and this increases operational cost of freight forwarders.
Since there is no shipping line in Nepal, Nepali freight forwarders have to bear the liability of the goods until it reaches the Kolkata port.
Raj Kumar Pandey, first vice-president of NEFFA, demanded the government to make it mandatory for international shipping lines to make operational base at ICDs in Nepal. He also added that other landlocked countries have access to international shipping lines through their own ICDs.
Freight forwarders see boundless opportunity in the sector if the nation´s exports improved. For this to happen, they see a need to promote export by offering different incentives and resolving labor problems and power crisis.
They also are excited about the prospect of getting access to a new port at Vishakhapatnam, India. However, the sustenance of this industry solely depends on improvement in exports.
Related story
Trans Nepal Freight Services secures 5-year contract to operate...
-1200x560-1779450784.webp)
