The Hindu Business Line : CBEC order allows cargo de-stuffing for foreign shippers

Chennai March 23 Till now, cargo de-stuffed from containers was meant only for domestic consumption. However, a recent order of the Central Board of Excise and Customs (CBEC) allows cargo meant for foreign shippers to be de-stuffed from containers and re-stuffed at Indian transhipment ports to be sent to foreign destinations.

With increasing demand from the trade, the CBEC has allowed de-stuffing of less than container load (LCL) meant for foreign shippers at Kochi, Chennai, Tuticorin and Nhava Sheva. LCLs are containers that pick up loads from various ports, as opposed to `full container load (FCL)', which are fully stuffed and sealed at the port of origin and opened at the destination port only. The stuffing of LCL is done by consolidators/shipping lines who pool in goods of various shippers in the same container.

Currently, only international transhipment of imported goods in FCL is permitted — where the container will not be opened at all, but will only be transferred from one ship to another.

Hitherto, de-stuffing of LCL containers could not be done due to reasons such as want of dedicated/secured space at cargo loading/unloading centres, according to industry sources.

However, to introduce international transhipment of LCL, the Custom Houses will identify suitable premises for safe custody of imported goods and for such other authorised operations. "Commissioners should adopt consultative approach with the stakeholders/operators to identify particular premises for such international transhipment," says a circular of CBEC, issued recently.

Projected benefits

The Consolidators Association of India has projected the benefits in terms of earnings in foreign exchange, attraction to foreign investment, employment opportunities, freight benefits to export-import trade and low transhipment cost. It is too premature to give any data of the likely traffic to be generated through the new norm, said a circular issued by the CBEC.

The permission for transhipment will not be given to cargo having arms, ammunition, explosives and other cargo considered as constituting a threat to the security/safety and integrity of the country and other goods attracting prohibition under Section 11 of the Customs Act, 1962. However, goods that are `restricted' as per the Foreign Trade Policy may be permitted for transhipment to destination abroad.

Through the new measure, consolidators/shipping lines can source goods in small quantity from different countries; use India as a transhipment hub and send packaged products to clients abroad, according to industry sources.

For instance, a consolidator can source pants from China; shirts from Sri Lanka; ties from the Philippines; shoes and undergarments from India; assemble them in an Indian port and send a complete men's package to Wal-Mart or Gap, said the source.

Trade facilitation

Allowing international transhipment of LCL will also be a measure of trade facilitation. It is also expected to provide transhipment facility to international shipping lines and enable ports to act as `transhipment hub' in the Indian Ocean, according to the circular.

LCL cargo meant for a foreign port would be de-stuffed in the presence of Customs officer and stored in a secured area as provided by Custodian. Whenever the LCL cargo are required to be exported to foreign destination, the re-stuffing of such LCL cargo meant along with the export cargo would be done under the supervision of a Customs officer. The container would be sealed in the presence of a Customs officer, the circular says.

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