DPD: Providing a respite to business
Brijesh Lohia, Managing Director, Global Ocean Group, shares his views on how JNPT’s latest tender call to Container Freight Station (CFS) to take Direct Port Delivery (DPD) is easing congestion and time limitations.
JNPT’s (Jawaharlal Nehru Port Trust) latest plan of tender calling out recently to all CFS operators could prove to be a respite for businesses that suffered initial hit from the Modi government’s latest initiative – DPD. The new plan offers CFS operators to bid directly to operate under the new regime. Although the introduction of DPD is deemed to prove highly favourable for importers, the limitations such as dispatching within 72 hour time-frame and congestion at the port has steered to question if our ports are ready for the DPD model.
To begin with, under DPD model, JNPT appointed one single CFS where all goods were offloaded and stored. But in an initiative to iron out early issues encountered since inception, the tender call which might select upto 10 CFS will facilitate importers with warehousing options and resolve congestion problems at the port. Another great benefit would be the cost cutting as the key criteria of the tender, as it will allow one fixed cost of handing to be charged by all CFS operators, as contrasted with inconsistent rates charged earlier.
Also, as per the initial DPD policy, it was intended to facilitate direct transfer of goods from port terminal to importer, as a result eliminating the presence of CFS - port warehouses where the cargo is stored after the shipment has reached the port. Even the custom clearance would take place before the shipment reaches the CFS, further contributing towards time saving. Prior to DPD regime, goods were stalled at CFS for couple of days for customs clearance but now customs authorities grant green channels to certain agencies based on past performance. The process also helps cut-time and costs as earlier goods that were held at CFS would cost up to `15,000, but now with DPD in place it usually doesn’t go beyond `7,000.