JNPT truckers strike over port productivity program

JNPT truckers strike over port productivity program

Harbor truckers serving the Port of Jawaharlal Nehru have parked their vehicles. Photo credit: Shutterstock.com.

Harbor truck operators at Jawaharlal Nehru Port Trust (JNPT) took vehicles off the roads Wednesday morning to pressure authorities to reconsider a regulated transport system rolled out May 1.

Local trade sources told JOC.com that all truckers in the public harbor are out-of-service and that the abrupt stoppage has put a halt to container handling by road, which represents the majority of JNPT’s supply chains. The disruption and resulting congestion threaten hard-won productivity improvements through a spate of government ease-of-doing-business initiatives in the past few years.

“The (freight) movement to and from all terminals in the entire JNPT region has been ceased by the transporters,” third-party logistics provider Gateway Distriparks Ltd. stated in an advisory sent out to its customers.

APM Terminals Mumbai on Tuesday issued a trade notice warning customers of possible disruption to laden import and empty container handling in the event of a strike. Efforts to reach the port and terminals for updates regarding the truckers’ boycott on Wednesday were unsuccessful.

The truckers’ concern is centered on exclusive handling rights that JNPT awarded to four logistics companies for the transportation of direct port delivery (DPD) shipments. The drayage community fears the decision will render most vehicles idle and the new operation will create a monopolistic environment in the market.

The logistics contracts cover five busy hinterland points in Maharashtra and Gujarat, which combined is estimated to generate nearly 600,000 TEU of DPD bookings annually based on current market trends.

The latest development in a long-running dispute

The selection of these transporters was an acrimonious bitter exercise marred by lengthy litigation that ended when the local high court rejected truckers’ arguments and ruled in JNPT’s favor.

“We have noted that the terms and conditions of the tender, and its object and purpose is in the interest of general public. The infringement, even if any, to some extent as stated by the petitioners, of the private interest of transporters/importers or few importers/transporters, cannot prevail over in the public interest so referred in the policy decision and the tender conditions,” the court stated in its order.

As shippers’ interest toward DPD steadily grows, authorities have been under intense pressure from the government to streamline inland logistics to maximize the intended cost benefits for shippers. However, the truckers’ revolt, reportedly backed up by local political groups, could prove to be a major setback for those efforts.

Under DPD, pre-approved shippers are able to pick up their import containers direct from the wharf within 48 hours of landing at the port, which does away with the shippers’ need to shift cargo to an off-site container freight station (CFS) for storage and customs clearance, which involves delays and extra costs. In addition to transporters, third-party logistics (3PL) companies engaged in the operation of CFS sites have also been reluctant to actively participate in DPD given the profits at stake under the typical “CFS” delivery model.

However, a recent customs rule change, allowing all CFS to handle DPD containers uncleared at the wharf after the timeline — compared with previous restrictions regarding a single port-designated off-site depot — should provide some relief to these 3PLs. The JNPT harbor houses more than 30 CFS sites.