DPD to CFS: A shift for the better?
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