Govt initiative on DPD Model Struggles, as Congestion at Ports Remain Unmanaged

Govt Initiative on DPD model

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The Logistics Headlines, New Delhi,20th March : While the Direct Port Delivery (DPD) system led the logistics industry to look for a ray of hope, all is not so well. Driving the ship packages from the ports immediately to importers, an initiative, has succumbed to infrastructure problems and business loss. The few companies intended to combine as its freighting warehouses and beneficiaries have now teamed up opposing the federal initiative.

The Clashes between DPD and CFS

DPD that saw its birth last year at outskirts of Mumbai, with Nhava Sheva Port, welfares the delivery of shipment between port to the consignee against holding the same at container freight stations (CFSs), which now has about 778 importers. At present, 70% of the nation’s containerized imports meet at CFSs, which the government wishes to convert the imports to DPD over the next few years.

Many of the intended beneficiaries, the importers opine that the Jawaharlal Nehru Port Trust (JNPT) of Nhava Sheva is still confined with severe congestion, making it harder to readily implement the DPD model.

The DPD model is consigning no difference in reducing costs or dwell-time. Though the direct port delivery in India aims at matching with global success for the same model to cut the time between landing of shipment and its travel from port to factor to one day than nine at present, the initiative is slow-paced given congestion hurdles at ports.

What do the Beneficiaries Have to Say about DPD?

The Air Conditioner maker, Voltas in their letter addressed to the additional commissioner of customs of the DPD department (Nhava Sheva), retell that their factory at Pantnagar (Uttrakhand) can only manage 10 to 15 containers in a day, but as per the direct port delivery model the delivery must be made of all 50 containers on the vessel that carries it.

Because of limited availability of vehicles between Mumbai to Pantnagar and other constraints, the company is facing troubles in adopting the DPD system. Thus, it has requested itself from getting removed off the DPD list.

On the other hand, VIP Industries (the luggage maker) reported their operations costs concerning the port have exceeded more than double the previous cost, underneath the DPD model.

Why CFS Should Remain as an Option for Importers?

According to new norms, the importer must lift its container in 72 hours of landing, failing which, it will be taken to a single CFS assigned by JNPT and functioned by Speedy Multimodes Company. But previously, the importers could choose from CFS operators. Nevertheless, the importers have contracts with CFS operators, which are a way to control inventory, rather than accumulating huge shipments in factories, but this facility has now vanished.

Unless the DPD model is updated, it will render India’s 34 CFS operators namely, Ameya Logistics, AllCargo, Hind Terminal, GDL among others, useless. The beneficiaries have been requesting the JNPT to allow importers take the option of availing services of CFS operators as well. Operators however know that consignment gets delayed at CFSs; agree that the activities from warehouses are accounted for 4% of the turnaround time.

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