Hinterland ICDs to be Affected with Scrap Imports Affirmed to Only 14 Seaports

Scrap restricted to hinterland ICDs

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The Logistics Headlines, New Delhi, 28th March 11:00 PM : The government in recent public notice served, reduced the number of assigned ports to just 14 for scrap imports, which will disable about a dozen of Inland container Depots (ICDs) from this service. Previously, such imports were valid through 26 ports and ICDs across the country. Under the commerce ministry, the Directorate General of Foreign Trade (DGFT) has said that imports of scraps will be restricted to fewer ports with no exceptions even for special economic zones and export oriented units (EOUs).

Ports that will be allowed to import scrap are:

  • Elmore, Cochin, Chennai, Mumbai, Kandla, New Manglore, Mormugao, Tuticorin, Paradip, Kolkata, Mundra, and Pipavav.

The removed ICDs are:

  • Ludhiana, Loni, Nagpur, Dadri, Jaipur, Jodhpur, Kanpur, Malanpur, and Udaipur, besides few others.

NOTE: The DGFT added that the designated 14 ports could import un-shredded scrap until 31 March 2018.

During this interval, the ports have to install and run operation of container scanner and radiation portal monitors. In a public notice 63/ (2015-2020), it was said that the respective seaports that do not meet the deadline are to be de-recognized for service of importing un-shredded metallic scrap after and from 1 April 2018. This is an amendment made in para 2.54 found in Handbook of Procedures for 2015-2020.

What could be the Implications of Scrap Transport via Roads?

The implication of the public notice will heavily affect the container train operators and hinterland ICD operators. Scrap is a major commodity for North India ICDs in Delhi-NCR and Ludhiana market. These are heavy weight commodities, and mainly transported from seaports to hinterland by rail mode of transportation. With sudden conversion of transporting the same, through roads will increase congestion, promote pollutions, and deteriorate condition of the roads due to heavy weight of cargo.

  • Scraps imported from hinterland to port will clear off at port side Container Freight Stations (CFSs) or ports itself and taken on to road, which can spark up the road rates.
  • In addition, an imbalance may strike for container equipment inventory, as most of the scrap is coming in 20 feet containers in import direction and thus arranging relative containers for export purpose could be one of the problems.
  • Another possibility is hike in need of transporters for this commodity, which may take some time to be arranged. Any delay in meeting the demand can lead to misappropriation of scrap movement, which was earlier fixed at certain seaports.
  • The responsibilities of government are on the rise already for road sector with a bounty of plans for bringing improvements in it. Now with scrap transportation via road, facilities have to be brought in to ease the said process.

In the times to come, the shift in scrap movement to road transport may not actually reap many benefits for the road sector. However, it may reduce congestion at seaports. The pressure on roadways due to the scrap transport has to be managed well so as to keep the road rates unaffected, a hike if any in it, has to be kept at the lowest, otherwise it will initiate discrepancies in road revenue and contribute to slowing down of to-and-fro of scrap containers throughout the country.

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