The direct port delivery (DPD) scheme was introduced at the Jawaharlal Nehru Port and Chennai Port by the Central Government, India, in order to make business go more smoothly. DPD allows importers to take delivery of the containers directly from the port terminals and haul them to factories without taking them first to a container freight station and from there to factories to check extra cost and time involved in the clearances. As a result, the companies that have invested thousands of crores to set up and run CFSs near India’s container ports face an insecure future.
A CFS is an off-dock facility licensed by the Customs Department to help decongest a port by shifting containerized cargo and carrying out customs-related activities outside the port area. JNPT was designed on the CFS model. In late 2016, the government directed JNPT and Customs to raise the proportion of DPD first from 3 per cent to 40 per cent and later to 70 per cent.
Mumbai firms such as Allcargo Logistics Ltd, Navkar Corporation Ltd, Gateway Distriparks Ltd, Container Corporation of India Ltd (Concor) and Balmer & Lawrie Co Ltd are among the 33 CFSs operating near JNPT. AP Moller Maersk Group A/S, which runs Maersk Line, the world’s top container shipping company runs two CFSs near JNPT.
On its part, the government wants CFSs to transform into modern warehouses for doing value-added services, which the CFS industry says would require more floor space index (FSI). Most of the stakeholders in the export-import logistics chain say that the DPD is an excellent concept, but are critical of the way it is being implemented, mainly because it will hurt their business.