DPD to CFS: A shift for the bet­ter?

Cargo Talk - - Contents - Kalpana Lo­humi

The govern­ment in­tro­duced the Di­rect Port De­liv­ery (DPD) scheme last year to cut cargo dwell time and cost, but the scheme is now be­ing dis­con­tin­ued. It also an­nounced the re­mod­elling of the cargo evac­u­a­tion sys­tem by plac­ing the CFS at the core of the plan­ning process. un­cov­ers the rea­sons that prompted the govern­ment to re­vert to the ear­lier scheme.

It has been a year since the govern­ment in­tro­duced the Di­rect Port De­liv­ery (DPD) scheme to ease busi­ness and cut down cost and time. The idea was to al­low im­porters/con­signees to take de­liv­ery of the con­tain­ers di­rectly from port ter­mi­nals and haul them to fac­to­ries with­out tak­ing them first to a Con­tainer Freight Sta­tion (CFS) and from there, to fac­to­ries. How­ever, the re­cent an­nounce­ment says that the govern­ment is work­ing on a plan to re­store the role of CFSs in the evac­u­a­tion sys­tem. ex­plores the rea­sons that prompted the govern­ment to re­vert to the ear­lier scheme. The val­i­da­tion be­hind the in­tro­duc­tion of DPD was to has­ten the evac­u­a­tion of cargo from the port, di­rectly to the fac­to­ries. What can be the govern­ment’s plan now to ad­dress the is­sue of con­ges­tion that is ham­per­ing op­er­a­tions? Ni­har Parida, In­dus­try Ex­pert, feels, “With the govern­ment de­ci­sion to al­low DPD, im­porters and ex­porters were relieved be­cause the cost per con­tainer re­duced and the us­age of space at ports in­creased. Op­er­a­tions also be­came smoother as the cargo ei­ther moved to or moved out of the port it­self, sav­ing a lot of time and cost. The big­ger pic­ture was that the govern­ment was tak­ing the right step to­wards strength­en­ing port in­fra­struc­ture.”

TN Seethara­man, CEO – Global Lo­gis­tics Di­vi­sion, Transworld Group, shares, “The in­dus­try, es­pe­cially the im­port com­mu­nity, is not geared for this change. Their sup­ply chain, in­clud­ing pur­chase pat­terns, quan­ti­ties, safety stocks, payment meth­ods, im­port L/C doc­u­men­ta­tion, funds plan­ning for payment du­ties, stor­age fa­cil­i­ties in their pro­duc­tion plant, will have to change. Com­pelling them to take DPD meant merely shift­ing the bot­tle­neck else­where in the en­tire sup­ply chain.”

With the govern­ment de­ci­sion to al­low DPD, cost per con­tainer re­duced and us­age of space at ports in­creased Com­pelling play­ers to take DPD meant merely shift­ing the bot­tle­neck else­where in the en­tire sup­ply chain

Ac­cord­ing to Kruti Joban­pu­tra, Di­rec­tor, JWC Lo­gis­tics Park, “DPD was not a new con­cept in­tro­duced by the govern­ment. It ex­isted ear­lier, but only a few im­porters made use of the ser­vice. The DPD scheme was rein­tro­duced with more trade or im­porter-friendly norms. JNPT and cus­toms com­ing to­gether ben­e­fited a num­ber of im­porters and cre­ated cost ben­e­fits for ev­ery­one. The sys­tems be­came more ef­fi­cient and smoother, which was a big ad­van­tage.”

DPD came into busi­ness due to cus­toms pro­ce­dures and space con­straints at many of the coun­try’s ports. Re­sul­tantly, cus­toms clear­ance takes place at the CFS. How­ever, DPD is ex­pected to speed-up de­liv­ery of cargo con­tain­ers to im­porters/con­signees to check ex­tra cost and time in­volved in clear­ances.

Joban­pu­tra lists a few rea­sons for the shift to CFS again: s 4HE IN­FRA­STRUC­TURE IS NOT BUILT TO ac­com­mo­date a DPD scheme. As a re­sult, the move­ment or turn­around time did not re­duce as was pro­posed in the scheme. s 4HERE WAS MORE PLAN­NING RE­QUIRED, keep­ing all stake­hold­ers like ship­ping lines, CFS, cus­toms house bro­kers, trans­porters, etc., on the same page.

TN Seethara­man CEO – Global Lo­gis­tics Di­vi­sion Transworld Group

Ni­har Parida In­dus­try Ex­pert

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