MUMBAI: In a likely breather to Container Freight Station (CFS) operators which otherwise ran the risk of losing massive amounts of business, the customs department at the Jawaharlal Nehru Port Trust (JNPT) has put out a tender calling for bids for CFSs to be part of the operations in the new Direct Port Delivery regime that the Narendra Modi government is trying to implement.
CFSs are port warehouses where the cargo is stored after being offloaded from a vessel. DPD ideally seeks to cut out the presence of CFSs facilitating direct transfer of shipments from the port terminal to an importer.
JNPT, which handled India’s largest container cargo tonnage, currently has 33 CFS operators including Allcargo Logistics, Ameya Logistics, GDL and Hind Terminal.
Under DPD, the customs department and JNPT had appointed one single CFS to which all goods would be transferred if they were not cleared 48 hours after landing.
Under the latest call for bids that was out on Friday, a maximum of 10 CFSs may be selected, giving importers more options to stock their goods, JNPT deputy chairman Neeraj Bansal
“We are in the initial phase of DPD and are doing very well,” said Bansal. “But you have to understand that JNPT is a CFS port, and our aim is to increase ease of doing business for the importers. Hence the new tender,” he said.
The move came after many stakeholders raised issues that an all-out shift to the new regime would create logistical problems. Some have already complained their costs have increased, instead of being cut.
citing a letter from airconditioner maker Voltas and opinions expressed by executives of VIP Industries in a recent meeting.
Bansal said that the main aim of DPD is to cut transaction costs and to this end, the key criteria of the tender would be to have one fixed cost of handing to be charged by all CFS operators. Currently, CFS operators charge different rates based on market dynamics.
Also, like in the case of a single stipulated CSF, the goods would only go to the new selected ones 48 hours after idling at the port terminal. This would mean that unlike earlier, the customs clearance will have completed before the goods move to a CFS.
CFS operators have been opposing an all-out implementation of DPD, saying that importers should be given an option on whether they want to use their services or not. The new tender too is unlikely to go down well with them.
“Why should we agree to a single stipulated rate? On what basis is that being fixed? And what are the criteria for choosing a handful of operators?” asked a top executive at a CFS operator who didn’t want his or his company’s name to be cited.
To be sure, DPD is a global phenomenon actively prevalent in more efficient ports and is slated to cut down dwell time for a shipment from nine days to a day, making a massive difference in turnaround time and transaction costs.
Also, the Modi government has taken a terse stance than its predecessors in implementing decisions which it feels will be beneficial for the economy. The recent example was of demonetisation which it went with full spate ahead, despite criticism from the opposition and economists worldwide.
JNPT on Tuesday also put out another tender to select one single transporter or aggregator to handle all truck operations for carriage of cargo out of JNPT, said Bansal.
This, he said was part of a larger initiative of providing a complete logistics solution to the importer.
“We are looking at changing the routes and the stacking processes for cargo too. As in the case of CFS, the transporter or aggregator we select will levy one regulated charge and will be more accountable,” he said.