No losing time on dwell time
Improved dwell time will enhance the capacity of existing port infrastructure and reduce overall costs, CARGOTALK but breaking it down is not an easy task. explores the consequences of higher dwell time and what can be done to reduce the same.
Dwell time, the time cargo spends within the port between unloading and pickup, is one of the most-accurate indicators of efficient logistics. These hours have become a major instrument to attract more cargo and generate revenue. Infrastructure gaps and high transport costs are serious factors that are hindering growth in the country. Above all, reducing dwell time is critical. To compete with international standards the government needs to come up with best practices to reduce dwell time and cut on free period at cargo terminals.
The government has undertaken several initiatives to cope with the burgeoning traffic of international trade and to bring the country’s logistics on a par with global standards.The Ministry of Civil Aviation is enthusiastic to reduce import air cargo dwell time from 72 hours to 48 hours and is also consulting stakeholders and associations for the same.
Explaining the significance of dwell time as an important indicator of the impact of trade facilitation measures, Ashish Mahajan, Managing Director, Landmark Logistics, elucidates, “Dwell time is the measure of the time elapsed from the time the cargo arrives in the port to the time the goods leave the port premises after all permits and clearances have been obtained. World Customs Organisation (WCO) prescribes this as an important indicator and Indian customs has also adopted the related norms. Although taken some measures for improvement in dwell time, the time taken by Indian ports and airports are still higher than the global benchmark.”
Sharing his perspective on the same, Yashpal Sharma, Director, Skyways Group & India Cargo Award winner 2016, says, “High dwell time makes supply chain ineffective and uncompetitive. The various producing economies of the world are today competing for price of product and for the order-to-deliver timeline. The logistics cost in India is high as compared to some of the other producing economies and if we do spend a lot of time at the ports and airports for the cargo movement then the Indian production and consumption markets will definitely suffer.”
Making the cargo stand for longer period at the ports makes a country slack as compared to other countries. Explaining from the exporters’ point of view, Cyrus Katgara, Partner, Jeena & Company, says, “Longer cargo dwell time at the ports and airports affect exporters adversely. On the
World Customs Organisation (WCO) prescribes dwell time as an important indicator and Indian customs has also adopted the related norms
one hand, they contribute to longer inventory holding time adding to the cost of inventory holding.
However, on the other hand it brings a lot of uncertainty in turnaround time and delivery schedules resulting in the erosion of competitive advantage and customer experience and buyer’s confidence in purchasing Indian products. Longer dwell times at ports is one of the factors that make us lose out to competing countries like China, Vietnam, Malaysia, Indonesia, Thailand etc.”
Consequences
As the hours of cargo stayat-port increase, the increased container dwell time further leads to congestion at the port. On this point, Katgara says, “Increased cargo dwell time means that cargo stays at the port for unusually long periods putting huge stress on the limited infrastructural resources such as warehouse space. Cargo and trucks waiting outside the terminals make it difficult to use various material handling equipment at the port, causing a cascading effect of allaround congestion.” According to Sharma, an improved dwell time will hugely reduce the congestion at ports leading to efficiency and speed of doing business. He says, “The unpleasant consequences are associated with delays, queuing and extra time of voyage and dwell of ships and cargo at the port. These often lead to extra costs, loss of trade and disruption of trade and transport agreements.” Mahajan further explains with the help of figures. “A high dwell time slows down the entire process. For the last seven to eight years, the dwell time in India has been 72 hours, far higher than the 24 hours it takes to clear 80 per cent of inbound air cargo at major international hubs like Singapore. The dwell time in Hong Kong is just four to eight hours. These often translate into extra costs, loss of trade and disruption of trade and transport agreements,” he says.
“If the dwell time and transaction cost is brought to the level of China and other South East Asian countries, we can safely expect additional orders to the tune of 25 per cent of current levels in the medium term and an increase of 50 per cent in the long term,” feels Katgara. What needs to be done?
Many ports and airports have recently opted for some innovative methods to reduce dwell time like DPD (direct port delivery), gate automation and RFID tags on vehicles. With similar opinions, Mahajan notifies, “Many ports have set up laboratories, besides this, better infrastructure, faster ICE Gate, container scanners, lesser paperwork, implementation of single-window clearance, etc. can help to reduce dwell time and increase efficiency of airports and ports.”
India has taken some measures for improvement in dwell time, the time taken by Indian ports and airports are still higher than the global benchmark Increased cargo dwell time means that cargo stays at the port for unusually long periods putting huge stress on the limited infrastructural resources Customs inspection is another aspect of organisation and procedures of customs checks can cause congestion at the point where cargo enters or leaves the country The unpleasant consequences of high dwell time are associated with delays, queuing and extra time of voyage and dwell of ships and cargo at the port
Katgara, on the other hand, talks about resorting to technology, “More IT-driven high precision and reliable processes are required to handle the through-put with time