Govt set to drop direct port delivery scheme ; throws a lifeline to CFS

      10/08/2018

Beleaguered container freight station (CFS) operators are set to get a fresh lease of life with the government working on an alternative cargo evacuation model to replace the direct port delivery (DPD) scheme. The new system will restore the role of these intermediaries in the supply chain backed by an e-marketplace for truck trailers, a top Shipping Ministry official said on Friday.

The DPD had triggered an “existential crisis” for CFS operators — some of them listed. The companies had invested thousands of crores over the years and employed thousands But the DPD reduced their earnings from handling, storage and inspection charges.

“We are now trying to remodel our cargo evacuation system with the CFS as the fulcrum,” Shipping Secretary Gopal Krishna said at the annual day of the Container Freight Stations Association of India. “We are going back to the thinking that was prevalent in the late 1980s when this concept started that the CFS should take the burden of being the first repository of the boxes and thereafter cargo will move,” he stated.

The plan now is that within 24 hours of landing, a container will move out of the port to a CFS with minimal processing. The regulatory paperwork and bundling, unbundling and repositioning of cargo would happen where it was originally meant to be done, at the CFS. “There is unanimity among stakeholders that this seems to be the best possible way forward if we have to control the dwell-time for exports and imports but largely for the latter,” he said.

Gopal Krishna said that the planned model raised the challenge of congestion which could be addressed by limiting the number of truck trailers at the port. Here, there is a possibility of utilising technology by creating a truck-trailer marketplace. Currently, trailers coming from factories with export containers go back empty.

But if the same trailer were to carry a box to the CFS, truck movement can be reduced in the port area. This will improve the capacity utilisation of the terminals, he said.

The issue the government is grappling with is liability. “We have trucks coming in with export boxes. If we ask the same transporter to carry an import box to a CFS, the issue of liability comes in. So, that’s the single point of challenge we are now starting to address. We’ll be able to tackle that in the next week or so,” he said.

“If this plan meets the regulatory requirements of the system, then I think we would have probably reached an ideal situation in which cargo gets evacuated from ports within a very short time,” he said adding that this would remove the uncertainty surrounding the CFS business.