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Facilitation of trade in the SAARC countries through strengthening logistic chains
M. A. Alim

          Logistics is treated as a singular entity. It is the detailed coordination of a complex operation involving many people, facilities or supplies. Military logistics is the organisation of moving, housing and supplying military troops and equipment.
Facilitation of trade among SAARC countries and the rest of the world should be based on improvements in the transport network with the strengthening of entire logistics chains. These chains include the complete set of services needed to move cargo from its point of production to the points of sale/consumption. An effective trade regime requires a full range of efficient logistics services with integration between them. Each link of a logistics chain must have sufficient capacity and effective interface with the preceding and following links. The type of logistics services required for cross-border trade varies depending on the goods that are being transported and the market for these goods. High value, time sensitive goods require more sophisticated logistics so that they can be delivered to the market in good condition as quickly as possible. Low value, time insensitive goods require simple logistics that reduce the overall cost of transport and provide reliable and consistent service. In both cases, the objective is to reduce transportation costs as much as possible, which involves a balancing of the cost, time, safety and reliability of delivery.
Over the last 50 years, the scope of analysis of transport services has been expanding. In the 1950s and 1960s, engineering analysis was used to examine specific components of a transport system, like a port or a road/rail link. In the 1970s, system analysis was used to evaluate the interaction between the links and modes of transport networks. The emergence of multimodal transport in the 1980s extended this analysis to multimodal routes and intermodal interchange. Towards the end of the century, the growing emphasis on door to door movements and just-in-time shipments shifted attention to logistics and to market analysis.
Analysis of shipments within the sub region of SAARC countries divides logistics in the following 3 (three) basic services:
Line-haul transport. This may be road, rail, inland water, maritime (ocean), air transport and inter-modal transfers.
Border crossings: These are at sea ports and land borders.
Complementary services: These include both physical services, such as storage, consolidation and repacking, and commercial services, such as trade, finance and insurance, customs clearance, transfer of shipping documents, and inter-business communications.
List of possible/potential sub-regional corridors.
1. Central Nepal / Kathmandu to Birganj/Rauxal to Kolkata/Haldia (Gateways: Kolkata and Haldia ports; Birganj/Rauxal on the Nepalese/Indian border; and Samastipur for Intermodal transfers):
The road south from Kathmandu, through the Terai, crossing the Nepalese border at Birganj, to Rauxal, and then by road down the NH28- eventually connecting e NH2 to Kolkata - then by the NH6 and NH41 to Haldia.
The road south from Kathmandu, through the Terai, crossing the Nepalese border at Birganj, to Rauxal, and then to Samastipur - then by broad gauge rail through Samastipur to Kolkata and Haldia.
2. Kathmandu to Birganj/Rauxal to Nhava Sheva/Mumbai (Gateways : Nhava Sheva and Mumbai ports ; Birganj/Rauxal on the Nepalese/India border; and Samastipur for Intermodal transfers)
From Birganj to Samastipur by road and from there by broad gauge rail connection west to Nhava Sheva, near Mumbai.
From Birganj to Nhava Sheva, near Mumbai by road - a route that may be particularly important when the Golden Quadrilateral and East-West Corridor are completed.
3. Thimpu to Phuentsholing to Siliguri to Kolkata/India (Gateways: Kolkata and Haldia ports; Phuentsholing/Jaigaon on the Bhutanese/Indian border; New Jailapaiguri for Intermodal transfers; and Siliguri as the site of a possible Inland Port):
The road south from Thimpo/Paro through Phuentsholing and across the border to Jaigaon and then using the NH31 through Siliguri and south on the NH34 to Kolkata.
4. Thimpu to Phuentsholing to Changrabandha (India) to Burimari to Khulna/Mongla port or via Jamuna Bridge to Dhaka or Chittagong (Gateways; Dhaka and Chittagong port, Burimari on the Bangladesh /Changrabandha (India) border; Phuentsholing /Jaigaon on the Bhutanese/Indian border)
From Thimpu /Paro through Phuentsholing and across India on the NH31, NH31 and state roads to Burimari and from there south on the N59, N56 and N5 to the Jamuna bridge and Dhaka.
5. Kolkata to Jessore to Khulna or via Jamuna Bridge to Dhaka or Chittagong (Gateways: Kolkata, Haldia, Khulna, Dhaka and Chittagong ports; Petrapole / Benapole and Gede/Darsana on the Indian/Bangladesh border; Ishwardi and/or Dhaka for possible intermodal/rail transfers)
From Kolkata there is a road connection on the NH35 and state roads to Petrapole /Benapole, then on Jessore from which via the N7 to Khulna or via the Goalando/Paturia Ghats to Dhaka.
From Kolkata there is a broad gauge rail connection to Gede/Darsana on the Bangladesh border, where there is an exchange of locomotives, and then north across the Padma River to Ishwardi and to the Jamuna Bridge. From there it will eventually be possible to cross by rail and continue to Dhaka /Chittagong.
6. Kolkata to Jamuna Bridge to Dhaka to Tripura, Manipur, Mizoram etc. (Gateways: Kolkata and Haldia ports, Petrapole/Benapole, Gede/Darsana and Agartala/Akhaura on the Indian/Bangladesh borders)
From Kolkata to Dhaka by road and then across the Indian border at Akhaura/Agartala and into the Indian states of Tripura, Mizoram, and Manipur.
From Kolkata to Dhaka by broad gauge railway and thence across the Indian border at Akhaura/Agartala and into the Indian state of Tripura by metre gauge railway.
7. Eastern Nepal to Biratnagar to Kolkata/Haldia (Gateways: Kolkata and Haldia ports; Biratnagar/Jogbani on the Nepalese/Indian border).
A road route from Eastern Nepal crossing the Nepalese border at Biratnagar/Jogbani and connecting to the NH28 - and thence through to Kolkata and Haldia.
8. Western Nepal to Bhairawa to Kolkata/Haldia (Gateways: Kolkata and Haldia ports; Bhairawa on the Nepalese/Nautanwa on the Indian border):
A road from Central Nepal crossing the Nepalese border at Bhairawa and connecting to the NH-18 and thence through to Kolkata and Haldia.
9. Uttaranchal via Nepal to Biratnagar and Bihar and via Kankorvita to Assam (Gateways: Kankarvita on the Nepalese/ Panitanki on the Indian borders).
The East-West highway through Nepal connecting the Indian state of Uttaranchal to the Indian states of Bihar (Eastern part) and Assam via Kankorvita.
10. Kathmandu to Kankorvita/Panirtanki, and via Fulbari Corridor to Banglabandha - thence to Khulna or Dhaka or Chittagong (Gateways:) Kankarvita on the Nepalese/ Panirtanki on the
Indian border, Banglabandha on the Bangladesh border, Dhaka and Chittagong ports and Siliguri as the site of a potential Inland Port):
The Fulbari road corridor allows connections between Kathmandu and Dhaka/Chittagong/Khulna - the corridor, which is about 16 km long section through Indian territory links Kankorvita in Nepal and Banglabandha in Bangladesh.
11. Assam Highway as a connector of centres in southern Bhutan and Sikkim (Gateways: Phuentsholing and other points on the Indian/Bhutanese border)
The Assam highway is used to connect access points along Bhutan's southern border and would also be used to connect a proposed improved link into Sikkim;
12. Assam Highway from Kolkata to Siliguri to Guwahati and North Eastern States (Gateways: Haldia and Kolkata Ports)
The Assam Highway from the Northeastern states down through Siliguri and then the North-South corridor to Kolkata and Haldia -
13 . Bangladesh Railway from Chittagong Port to Akhaura/Agartala in India.
14. Bangladesh Railway from Chittagong Port to Shahbajpur to Mahishasan/India thence to Karimgang/Guhawati.
15. Inland Water Transport Routes-(i) through the Sunderbans bypassing Narayanganj and continuing up the Brahmaputra river to Assam, (ii) terminating at Narayanganj, (iii) terminating at Ashuganj
Corridor border stations being Namkhana (India) and Angtihara (Bangladesh) via Brahmaputra river to Chilmari (Bangladesh) and Dhubri (India).
Border crossing documentation: Customs clearance procedures add significant costs and delays though they represent small part of the logistics chain. Documents that are submitted to customs at border crossings are more or less the same, like invoices, packing lists, certificate of origin, letter of credit, and quarantine forms for plants and foods. Moreover, import licenses, export permits and some other certificates are also required in special cases.
Logistics costs are related to the following activities:
Loading at the origin and unloading at the destination.
Line-haul movements.
Intermediate handling at the border crossings and ports.
Customs inspections.
Implications of Logistics Constraints and characteristics of goods
The efficiency and effectiveness of different routes depend on both the characteristics of the route and the nature of the cargo being moved. Cargo is typically break bulk, unitized or bulk. Each requires specialized handling systems if the goods are to compete effectively for market share. The type of cargo and the markets in which it is sold determine the type of logistics services required to compete effectively for market share. The important cargo characteristics are as follows:
The value of the cargo per unit volume or weight.
The susceptibility of the cargo to damage while in transit and when handled.
The physical and commercial life of the cargo. Fruits and vegetables have short physical life. Garments and footwear are affected by changes in season and fashion.
Multimodal Transport may solve the problems between the SAARC countries:
Shippers generally prefer the mode that handles large consignments but minimizes the number of handling. Rail is the most popular mode, followed by water transport. Since multi-modal transport of goods is the carriage of goods by at least two different modes of transport on the basis of multi-modal transport contract from a place in one country at which the goods are taken in charge by the multi-modal transport operator to a place designated for delivery situated in a different country, SAARC countries may utilize this transport system for quick shipment of cargo. Combined/Multi-modal transport operator can organize the entire transport in the region by issuing a Combined/Multi-modal transport document. Cargo can conveniently move between SAARC countries in sealed and locked containers under multimodal transport system with the advantages to the shippers, like:
(i)Saving in packing cost, (ii) Reduction in inland transport costs (wagon, truck etc.), (iii) Less inventory costs as a result of less transit time, (iv) Stable inventory control made possible by stabilizing ship/train's operation schedule, (v) Less damage to cargo.
Cargo may be transported with the help of (i) General/dry cargo container, Thermal container, like
(a) Refrigerated (Reefer) container, (b) Insulated container, (c) Ventilated container and (d) Thermovac container. (iii) Special container--(a) Bulk container, (b) Tank container, (c) Open top container, (d) Platform container, (e) Platform based/Flat rack container, (f) Side open container,
(g) Car container, (h) Pen or Livestock container, (i) Hide container, (j) High cubic container.
Since the choice of routes for trade flows is based on
(i) total logistics costs, (ii) time required for door to door movement, (iii) reliability of delivery, (iv) condition of delivered goods, customs sealed (in-bond) and shipping agents bullet seal locked containers will be the answer for movement of goods under multimodal transport system between SAARC countries.
(The writer is Adviser, Bangladesh Shipping Agents' Association, Stock Exchange Bldg., Agrabad, Chittagong.)


  More Headline
A special focus on Bangladesh's export growth and competitiveness
Facilitation of trade in the SAARC countries through strengthening logistic chains

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