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PMO to shipping ministry: Increase direct delivery’s share to 40 per cent

In a recent performance review, the shipping ministry identified DPD system as one of the primary ways to decongest major ports of the country.

Written by Deepak Patel | New Delhi |
December 14, 2016 4:23:44 am
india business, business in india, shipping ministry, india news, india business rank, business news, latest news The PMO had also asked the shipping ministry to convert all ports, which are still dealing with paperwork manually, to electronic data interchange (EDI) ports by September this year.

Giving a push to the ‘ease of doing business’ initiative, the Prime Minister’s Office (PMO) has directed the shipping ministry to increase the share of “direct delivery” consignments at Indian ports to 40 per cent by the end of this year.

Under this direct port delivery (DPD) system, the imported containers are directly delivered to the pre-approved clients instead of waiting at container freight stations for clearance. “Ministry of Shipping will increase the number of direct delivery consignments to 25 per cent by September 30, 2016 and 40 per cent by December 31, 2016,” said the minutes of the meeting chaired by Nripendra Mishra, principal secretary to PM, on May 7 this year.

In a recent performance review, the shipping ministry identified DPD system as one of the primary ways to decongest major ports of the country. It was only in February this year that India’s largest container harbour Jawaharlal Nehru Port Trust (JNPT) extended its DPD facility to each of its pre-approved clients, irrespective of their trade volume.

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Before this February directive, just 10-14 importers were availing the DPD facility as they were the only ones that were able to fulfill the criteria of importing at least 300 twenty-foot-equivalent units per month. Once this criteria was removed by JNPT, around 150 importers started using DPD facility. Currently, around 467 importers — which is approximately 10 per cent of the overall importer base of the port — are availing the DPD facility.

In February, Anil Diggikar, chairman of JNPT, said, “When a container is at the container freight station, it costs Rs 10,000 per day per container on an average to the importer. So, if it lies for 9-10 days, the cost goes up to Rs 1 lakh per container. With DPD facility, there is a direct saving of Rs 1 lakh per container, and reduction in inventory, logistics and transaction costs will be added advantage to the importers.”

In a notice dated July 18, the Chennai Port Trust (CPT) asked its container terminal operators — Chennai Container Terminal Private Limited (CCTPL) and Chennai International Terminal Private Limited (CITPL) — to increase the share of DPD facility by 40 per cent by the end of this year. It asked these two operators to increase their yard space for handling the direct delivery containers in order to create an effective DPD facility at their terminals.

“Both the terminal operators intimated that all the direct delivery containers are segregated and stacked in container yard for an effective DPD without any delay,” the notice stated. The CPT also asked the importers to avail this facility at the port by registering their names with the two container operators after getting an approval from the customs department. At June, 2016, the share of containers that were passed at Chennai port using DPD facility was 12 per cent only.

At the May 7 meeting at PMO, the shipping ministry was also asked to install scanners at JNPT port and Mundhra port by September 30, 2016. The customs department plans to incorporate 44 scanners at various ports before March 2017, comprising of 11 drive-through scanners owned by the department and 33 mobile scanners that will be procured by private ports and operated by customs department.

The PMO had also asked the shipping ministry to convert all ports, which are still dealing with paperwork manually, to electronic data interchange (EDI) ports by September this year. Moreover, it has also asked to integrate port community system and terminal operators filing system with ICEGATE, which is the e-commerce portal of Central Board of Excise and Customs (CBEC).

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