Adequacy and effectiveness of logistic services in Nepal : implication for export performance
Abstract
By Pushpa Raj Rajkarnikar
This study examines the adequacy and effectiveness of delivery of logistic services and their implication for export performance of Nepal. It provides a detailed assessment of the current trade facilitation and logistics situation in Nepal, including on transportation, storage and handling services.
The results of an exploratory survey of freight forwarders and exporters conducted as part of the study indicate low level of efficiency of logistics in Nepal. This is consistent with benchmark indicators available from global databases (e.g., Logistic Performance Index, Doing Business indicators).
Compared to India and Bangladesh cost of inland transport and handling is remarkably high in Nepal as substantial cost involves in transit transportation to the sea port. Thus Nepalese exports are less cost efficient as compared to main competitors. Frequent landslides and congestion in some sections of road corridors, frequent strikes and road blocked, insecurity, illegal octroi and syndication among truck owners are the major logistic problems being faced by Nepalese exporters with in the country. Bad road conditions in certain sections of transit corridor and port congestion are the major problems in the transit country. Need of transshipment from feeder vessel to mother vessel and insurance against deflection are other problems incurring extra costs on exports.
While there are many different institutions in place to regulate logistic market, they are not able enough to eliminate syndicate or carteling particularly in road transport. Nepal has bilateral agreements related to trade logistics with India, Bangladesh and China. Also it is a member of SAFTA, BIMSTEC and WTO. Different provisions of these bilateral, regional and multilateral agreements provide scope for Nepal’s export promotion through logistic development.
Women participation in export and related logistic business was also examined as part of the study. It is found to be low mainly because of lack of exposure, orientation and skill of entrepreneurship, social environment, uncertainty in property inheritance right, and level of technological know-how.
