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JNPT eyes measures to speed direct port delivery cargo

      11/28/2018

Customs and other stakeholders at Jawaharlal Nehru Port Trust (JNPT) — India’s busiest container harbor — will consider measures to streamline direct port delivery (DPD) operations after the government voiced concern about lengthy gate-in/gate-out hours, amid its effort to substantially decrease dwell times.

Customs officials, at a recent stakeholder review meeting, stated that dwell times remain a major concern, despite considerable, continual shipper interest in DPD. Under DPD, accredited importers can clear their cargo directly from the wharf within 48 hours of landing at the port, instead of via an off-dock container freight station (CFS).

DPD means much more than quicker cargo clearance. The government believes the elimination of supply chain intermediaries — who have had a dominant role in customs clearance-related services at JNPT — can reduce logistics costs substantially.

Furthermore, with intense government pressure, DPD has grown in popularity, rising to an average of 62,000 TEU per month, or about 47 percent of the port’s total monthly laden import dishcarges, according to statistics presented at the meeting.

However, statistics reveal another glaring fact: as much as about 75 percent of cargo declared “out-of-charge” under DPD is shifted off-site for storage, after clearance from the wharf, largely because of shippers’ general tendency to store goods longer at portside yards, due to a space crunch alongside their production sites. For example: out of 61,729 TEU booked/cleared through DPD during September, only 14,861 TEU, or 24 percent, were directly transported to designated delivery points.

Although that’s somewhat good news for third-party logistics providers (3PLs), companies facing headwinds from widespread government reforms and prolonged weak demand, the continued CFS phenomenon undermines the broader DPD aim. As a result, the import dwell time progress achieved thus far has failed to meet government expectations — averaging 157.5 hours during August, much longer than the 72-hour goal.

“All stakeholders need to work together and bring down the dwell time to double digits, i.e., 72 hours by January 2019,” officials stated.

To address those issues, customs officials urged stakeholders to suggest new incentives for shippers able to clear DPD cargo within 24 hours, versus the stipulated 48-hour timeline. JNPT officials highlighted various DPD-facilitating steps already put in place by them, including a dedicated truck lane at PSA International’s Bharat Mumbai Container Terminals (BMCT), and daily separate time slots — dubbed “happy hours” — at APM Terminals Mumbai; meanwhile, DP World Nhava Sheva has agreed to explore additional pro-DPD services.

Further, in response to a request from intermodal logistics provider Container Corporation of India (Concor), customs officials stated that BMCT has allocated a dedicated space for DPD containers handled by rail and have urged other terminals to follow suit or devise similar solutions. Authorities have also asked stakeholders to examine the possibility of extending inter-terminal transfer services to DPD cargo.

Under the inter-terminal operation, logistics providers can transport cargo booked by multiple terminals and discharge or load all such containers at one terminal.

Customs also cited trade complaints regarding delays in the clearance of CFS-nominated DPD containers and issued instructions to all stakeholders to resolve those issues.

DPD has been one key factor consistently highlighted by the World Bank in its recent ease-of-doing-business evaluations for India — one reason why its rank jumped 23 spots to 77th out of 190 nations in the World Bank’s latest report. As such, the emerging market economy is extremely keen on further expanding/streamlining this reform program.