Some 33 container freight stations (CFS) serving Jawaharlal Nehru Port, India’s second-largest container gateway, may be losing more than 20,000 20-foot equivalent units (TEUs) a month cumulatively after customs officials last October ordered all factory-filled export containers should only be disposed of via the Centralized Parking Plaza (CPP) developed by the port authority for documentation and onward journey to the terminals for loading onto ships.
Customs also ordered that if a factory-filled/sealed export container misses a ship, it can be stored in the Centralized Parking Plaza’s buffer store until the next ship arrives.
Customs’ dual decisions have dealt a blow to the business prospects of container freight stations, some of which are operated by logistics companies such as AP Moller-Maersk, Container Corporation of India, Allcargo Logistics, JM Baxi Ports & Logistics, Central Warehousing Corporation, Balmer & Lawrie, Gateway Distriparks , Continental Warehousing (Nhava Sheva), Seabird Marine Services, Navkar Corporation, PSA International, Apollo Logisolutions, Punjab State Container & Warehousing Corporation and Maharashtra State Warehousing Corporation.
It is also the second time the CFS has faced an existential crisis after the government introduced the Direct Port Delivery (DPD) program a few years ago.
Under the DPD scheme, import containers are delivered directly to pre-approved customers in the port itself, rather than waiting in a CFS outside for clearance, reducing cargo hold-up time and costs for shippers.
A CFS is a Customs approved off-dock facility that helps relieve a port’s congestion by shifting containerized cargo and conducting customs-related activities outside of the port area.
In October 2020, the Jawaharlal Nehru Port Authority, the state-owned entity that operates the port near Mumbai, opened a centralized container tractor trailer parking lot as well as tariff relief as part of its efforts to simplify operations.
1,538 tractor units can be parked at the same time on the 45 hectare site.
The plaza was built to integrate the parking of tractor-trailers with factory-filled export containers in one location instead of multiple locations previously. It was also designed to integrate document processing by the customs department, facilitate the movement of container trucks on port roads, and help terminals better plan their trailer truck movements.
The Port Authority has entrusted the operation, management and maintenance of the centralized car park to a private company – Divvya CPP Pvt Ltd. – outsourced.
Around 35 percent of the export containers handled in Jawaharlal Nehru Port are factory-sealed containers.
CFS operators said the October Customs order “deprived them of a legitimate and lawful business interest.”
It has also created a “monopolistic” situation in favor of a private entity that manages the centralized car park owned by the Port Authority.
“The Customs Authority’s decision harms the interests of the container freight stations, which as Licensed Customs Freight Service Providers (CCSPs) have invested money in equipment and IT infrastructure for cargo handling, in addition to providing jobs for hundreds of local youth,” said a CFS operator.
“In order for deals to be conducted in a fair and transparent manner and for it to be easier to do business, exporters should have the right to choose their preferred service providers from among the CFS, as well as the competitiveness and service level of the CPP operator base. Why should exporters be forced to go to a single entity designated by the customs authority,” he asked.
Rajesh Pandey, Chief Commissioner of Customs, Mumbai Zone II, who oversees the Jawaharlal Nehru Custom House, did not respond to an email from ET Infra seeking comment.
Jawaharlal Nehru Ports Authority Vice-Chairman Unmesh Wagh said the centralized car park has helped reduce the stay time for exports in the port by 20 percent to 3 hours.
The car park is only 5 km from the terminal gates, which requires a 30-minute drive.
“Channeling factory-filled export containers through the parking lot is the cheapest and most convenient way to ship export cargo,” he said.
Trade sources said moving export containers through the Centralized Parking Plaza is “cheaper” than CFS when a ship is waiting to load containers.
“But when a ship is expected after 4-5 days, exporters go to a nearby CFS to deposit their containers, which are then carted to the terminal gates by the CFS operators in time to catch the next ship upon its arrival reach,” a trade source said.
Source: www.maritimegateway.comShare it now
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