Third-party logistics providers (3PLs) at Jawaharlal Nehru Port Trust (JNPT), battling to sustain themselves in a marginalized operating environment as a result of government trade reforms, hope to reinvigorate their growth prospects, following a customs rule revision regarding imports booked under the direct port delivery (DPD) program.
Heeding requests from the 3PL community engaged in the operation of container freight stations (CFSs), the customs agency put aside a previous decree restricting storage of DPD containers left uncleared by consignees at the wharf, to a single, port-designated off-site depot, and instead reopened that business to all storage yards in and around the port.
“Considering the fact that there is increased compliance and steady growth in the volume and percentage of containers being cleared under DPD, it has been decided that port terminals should henceforth transfer [those] containers to any CFS as nominated by the shipping line, instead of the designated CFS,” the authority said.
Under DPD, pre-approved importers can pick up their freight directly from the wharf, rather than routing freight through an off-site depot, which involves delays and extra costs. Such containers must be removed within 48 hours of landing at the port, and if a shipper fails to meet that time frame, their cargo is then moved out of the terminal yard and stored at a CFS, at the shipper’s cost, for clearance under the normal customs procedure.
Shippers have flocked to DPD program
Buoyed by significant cost savings, regarding the traditional “CFS delivery” model, which customs officials peg at about 30,000 rupees ($459) per TEU, shippers’ interest toward the DPD clearance plan has increased dramatically in recent months, with JNPT handling nearly 40 percent of its laden imports via DPD last month.
The JNPT harbor houses more than 30 CFS sites and customs clearance had long been a key revenue earner for these 3PLs, as supply chain intermediaries. However, with that steadily growing model shift, their core operations have taken a hit, forcing some of them to reinvent their logistics offerings and target newer, emerging port locations for expansion.
DPD is an integral part of the Indian government’s vigorous efforts to cut logistics costs for domestic shippers and, as such, there is unlikely to be any pause regarding that push, as amply evidenced by a series of proactive measures in the pipeline to further popularize the speedy import program at JNPT and other major ports.
DP World, which has two terminals at JNPT, Tuesday told JOC.com that it remains fully committed to India’s ease-of-doing-business initiatives. To that effect, the global operator said it has put in place adequate resources — such as a dedicated yard and trained personnel — to provide round-the-clock services to facilitate timely clearance of DPD shipments.
The Dubai-based company is also weighing a plan to introduce "on-wheel" container examinations in unison with government agencies, and said its terminals at JNPT have signed more than 1,200 customers for the DPD clearance model over the past year.
As a result, DPD volume at DP World Nhava Sheva in March surged 56 percent to 14,233 TEU from 9,121 TEU in March 2017, statistics show.
“Our customers in the supply chain have highly benefitted from the successful implementation of DPD by the port authorities, customs, and us,” DP World Nhava Sheva CEO Ravinder Johal told JOC.com. “It is our constant endeavour to increase the reliability of on-time delivery and continue being a catalyst in providing faster and cost-effective trade solutions.”
JNPT handles the majority of India’s container freight and, as such, the government is extremely keen on reducing cargo dwell times and ensuring seamless supply chains there.