Eas­ier move­ment of con­tain­ers gain trac­tion


The di­rect-port-de­liv­ery (DPD) sys­tem, which fea­tured in the World Bank ease of do­ing busi­ness re­port that put In­dia 30 notches higher, is gain­ing trac­tion.

Pri­vate and less con­gested con­tainer port ter­mi­nals are also of­fer­ing the DPD sys­tem, which was ini­tially started at the Jawa­har­lal Nehru and Chen­nai ports to re­duce port con­ges­tion. The ser­vice al­lows im­porters and con­signees to take de­liv­ery of con­tain­ers di­rectly from port ter­mi­nals, with­out hav­ing to park these at a con­tainer freight sta­tion (CFS), be­fore be­ing taken to the fac­to­ries. The DPD sys­tem was in­tro­duced in 2016, spurred by the ear­lier re­port of the World Bank on ease of do­ing busi­ness.

“We do have CFS fa­cil­ity at our port,” Vinita Venkatesh, di­rec­tor at Kr­ish­na­p­at­nam port's con­tainer ter­mi­nal, told Busi­ness Stan­dard, “but we give the im­porter an op­tion to take di­rect de­liv­ery of the con­tainer as it would mean lower cost for the con­signee.”

Pri­vately built Kr­ish­na­p­at­nam port in Andhra Pradesh’s Nel­lore district is set to give stiff com­pe­ti­tion to Chen­nai, about 180 km away, one of the largest and busiest con­tainer cargo port on the east coast.

The Visakhapatnam port is also see­ing in­ter­est for DPD ser­vice this year though it does not face con­tainer con­ges­tion. “Im­porters save CFS costs of ~7,000-8,000 a con­tainer,” said P L Haranadh, deputy chair­man of the port. “Last year, we had just about 2 per cent of con­tainer im­porter cargo go­ing for DPD. This year, it has in­creased to 17 per cent. Now we are hope­ful that we will close this fis­cal year above 20 per cent and main­tain this mo­men­tum over the next two years as well,”

Ex­perts said the DPD sys­tem was start­ing to im­pact rev­enues of CFSs near ports. Con­tainer hubs would have to re­work their busi­ness mod­els. CFSs op­er­at­ing near con­tainer ports such as the Jawa­har­lal Nehru port in­clude All­cargo Lo­gis­tics, Navkar Cor­po­ra­tion and Gate­way Distri­parks.

“CFS com­pa­nies will have to re­work their busi­ness mod­els, which means they could fo­cus on more num­ber of smaller clients rather than one large client, to make up for the hit,” said K Ravichan­dran, se­nior vice-pres­i­dent and group head, cor­po­rate rat­ings at ICRA.

CFS play­ers would have to dif­fer­en­ti­ate them­selves based on ser­vice qual­ity or di­ver­sify op­er­a­tions to other ports, said Subrata K Be­hera, man­ager-ports & con­tain­ers re­search at Drewry, an in­de­pen­dent mar­itime re­search con­sul­tancy.

But Prakash Tul­siani, ex­ec­u­tive di­rec­tor and chief op­er­at­ing of­fi­cer at All­cargo Lo­gis­tics, said con­tainer freight sta­tions would con­tinue to re­main a cru­cial link in the im­port-ex­port chain. “Cus­tomers are now in need of a port­fo­lio of ser­vices — like Cus­toms clear­ance, sort­ing, pack­ag­ing, last-mile de­liv­ery, etc — than a pure-play, vanilla of­fer­ing. Large or­gan­ised lo­gis­tics play­ers like ours have the ca­pac­ity and band­width to of­fer cus­tomers a pack­age of fully in­te­grated in­ven­tory man­age­ment ser­vices through their CFS fa­cil­i­ties.”

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.