Source Logistics Cluster
Document type Other
Publication date 11/10/2005

Local Transport Companies

Possibly more than 90% of all the 20,000 trucks registered in Nepal are 8-10T Tata trucks which are well suited to cope with the steep and narrow roads in the hills and the mountains.

The Tata truck is in fact so popular that it is used as a yard stick in the building of new roads, a policy that the Department of Roads describes as making the roads "Tata compatible".

There are no large transport companies in Nepal. Thousands of individuals own either one or two trucks and, in order to survive, are prepared to operate at very low cost thus preventing the establishment of larger transport companies.

Truck Owners Associations are producing Rate Schedules which are indicative. Transport rates vary according to the security situation and the time of the year (monsoon, harvest).

The moment any sizeable tonnage has to move, Transport brokers are being used.

International transport

Different combinations are used when importing international cargo in the country:

1. In theory Nepali trucks are allowed to collect cargo in Calcutta and Haldia. However for most of them this would mean an empty run and they are not competitive. Most of the cargo from the ports does move on Indian registered trucks.

2. Indian registered trucks may enter and stay 72 hours in Nepal. Goods destined to businesses and industries in the Terai normally enter that way.

3. Nepali trucks are allowed to collect cargo from the closest railhead in India or goods may also be transshipped at the border on Nepali trucks. That is the case for about all the Kathmandu cargo.

Domestic traffic

The availability of trucks varies considerably depending on the regions. A system of road licenses is limiting truck operations in only one region. Additional licenses are needed for transport to other regions.

However most truck owners are based in the Central Region (Birgunj, Kathmandu) where 65% of the international traffic is transiting through the Birgunj border post.

Rail Transport

From Calcutta and Haldia cargo can be dispatched either by road or rail. However Nepal is not connected to the Indian railway system (1.676m gauge) so that any cargo sent by rail has to be offloaded at the nearest railhead to the India/Nepal border.

By and large most of the rail cargo dispatched from the ports has to go in unit train (called "rake") carrying 2,300mt at a time to the Indian town of Raxaul. Three rakes are operated weekly. A train will take one week to reach Raxaul where the cargo is transshipped on mainly Nepali trucks going to Kathmandu through the border post of Birgunj in Nepal, where customs clearance is performed.

A rail based Inland Clearance Depot has been built and completed two years ago in Birgunj. It is connected exclusively by rail with India and by road with Nepal. ItĀ features

  • a boundary wall of 3.1km long and 3.6m high
  • an administrative block of 1130 sq.m.
  • a container stacking yard of 685 x 64m with 656 ground slots capable of holding 1586 TEUs
  • a covered Container Freight Station of 203 x 35m with 231 ground slots
  • a high-level goods platform of 38.5 x 700m with full rail rake length
  • a covered Goods Shed on 1.m high platform of 405 x 26.5m
  • a Covered Customs litigation shed of 25 x 21m

Three brand new Fantuzzi stackers of 45mt capacity and one of 7.5mt are on site. Completed and tested two years ago the ICD is not being utilized and is completely empty. Negotiations are still taking place between India and Nepal as to how it should be operated.

Three points remain to be resolved:

  1. 1. Nepal insists that the ICD should be considered as a Dry Port where customs transit formalities should be processed instead of Calcutta
  2. 2. Nepal transit traffic should enjoy a preferential tariff in Calcutta/Haldia so that users are not penalized by transiting their goods through Birgunj ICD
  3. 3. Both countries have still to agree on the managing company for the ICD, India insisting that it should be an Indian one.