JNPT’s direct port delivery facility to reduce costs for importers

In a bid to boost trade and enhance transition times from the port, the Jawaharlal Nehru Port Trust (JNPT) has started a direct port delivery (DPD) facility at its container terminal. The facility is expected to benefit importers as the containers will be directly delivered to the consignees, instead of waiting in container freight stations (CFS) for clearance, which takes anywhere between 9 and 11 days. At the facility launch event recently in Mumbai the JNPT officials highlighted that the facility would lead to tremendous cost savings for importers on transaction, logistics and inventory, bringing costs down to a fraction of present expenditure incurred. Initially, JNPT started with only one CFS. With year on year increase in cargo and opening of many CFSs, commissioning of two more terminals under its umbrella i.e. NSICT & GTI, the dwelling period of import laden containers delivered to local CFSs was in the range of 6 to 7 days in early 2000. Subsequent to streamlining of yard, equipment and delivery procedures including en-block movement of import laden containers to nominated CFSs by the shipping lines, port terminals of JNPT the dwell period was brought down to 1 to 1.5 days as against 6 to 7 days existing earlier. In the year 2007, through Accredited Client Programmer (ACP), the Risk Management System (RMS) was implemented in major ports which envisage assured facilitation to the clients meeting specified criteria in terms of duty, volume of imports and clean compliance record. The proposed arrangement enabled importers with ACP status to receive DPD of their containerised imports without routing them through CFSs. 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.” To facilitate DPD, keeping in view various constraints like yard, additional equipment, man power and unfruitful/multiple shifting, a bench mark of 50 TEUs per voyage to be imported by the agency was fixed as the eligibility criteria for availing DPD facility. However, over a period of time, with improvements in the operating system, in order to reduce the transaction cost per container, JNPT liberalized the minimum volume of containers be imported by ACP clients to 300 TEUs on an average per month covering all three terminals of JN Port as a part of the policy to extend the benefit of DPD facility to more number of ACP clients.