The government plans to implement an electronic cargo tracking system for Nepal-bound shipments at Indian ports from June in a bid to slash the cost of trading.

The system will keep track of consignments from the time they leave until they arrive at their destination in Nepal. Containers will be tagged with an electronic chip when they leave the port which will allow authorities to keep track of them continuously.

“We had aimed to implement the system from April, but we put it off at the request of Indian authorities. We also thought that it would be good to wait until local elections scheduled for May 14 were held,” said Rabi Shankar Sainju, spokesperson for the Ministry of Commerce.

According to him, the system enables authorities to follow shipments as they are being transported. “Apart from letting us know where a particular shipment has reached, the system could help control possible pilferage and reduce demurrage charges for traders.”

Sainju said the government would be signing a memorandum of understanding with Indian authorities to implement the system. “The complete modality to operationalise the system will be fixed during the agreement,” said Sainju, adding that Indian authorities had been running a similar pilot project for cargo bound for Bhutan for the past one year.

According to the Commerce Ministry, an authorised entity will attach the chip to containers at Kolkata Port or Vishakhapatnam Port. It will follow up the containers until they reach Birgunj Dry Port where the tracking devices will be retrieved.

The ministry’s plan follows calls from traders that the government should act to reduce trading costs. Traders have complained of cargo theft during transit.

Likewise, shipments have been delayed deliberately by shipping agents and transporters, forcing traders to pay additional charges.

Rajen Sharma, past president of the Nepal Freight Forwarder’s Association, was sceptical about the enforcement of the system. “Though the system is expected to control pilferage and cut demurrage charges, it is yet to be seen whether there will be significant reductions in costs for traders,” he said.  Traders will be charged Rs3,000 to Rs3,500 per container for the tracking service, said the Commerce Ministry. “The time of dispatch from the port, cost and reliability of the system are what matter for the long-term viability of the system,” Sharma said.

According to him, traders have agreed to implement the system as a pilot project for three months.