Trade Facilitation

Description

According to the World Bank Logistics Performance Index (LPI) (2012) that measures countries’ trade logistics efficiency, Nepal was ranked 151st, recording one of the bottom 10 performers of the year. Its general performance is below the regional averages, while the LPI pointed to international shipments, infrastructure, and timeliness as key weakness. According to data collected by the World Bank Doing Business Report (2013), exporting or importing a standard container of goods requires on average 40 days, 10 days longer than the regional average. Half of the days are spent either at ports or terminal handling or inland transportation and handling. Moreover, it costs USD 300 more per container for Nepalese exports or imports than the regional average. More than half of the cost is again spent on ports and inland transportation. Such high costs and long transportation times originate from Nepal’s geographical constraints as a landlocked country. While approximately 90 per cent of traded goods are transported by road, approximately 60 per cent of the road network is concentrated in the Southern grassland region, the so-called Terai and is in poor condition. In addition, sea cargo needs to be transported to Kolkata and Haldia ports in India in order to be traded internationally. However, transit times and costs of Nepal-bound sea cargo are beyond the control of Nepalese authorities (World Bank 2013).


Logistics Performance Index (LPI): Country Comparison
Source: World Bank, Logistics Performance Index (LPI)

Note: Source: World Bank, 2012

Logistics Performance Index – Evolution
Source: World Bank, Logistics Performance Index (LPI)

Note: Source: World Bank, 2012