Allcargo leads the race for JNPT box-hauling contract

Mumbai-listed Allcargo Logistics Ltd is leading a line-up of 12 groups that have submitted bids to haul containers landing at Jawaharlal Nehru Port Trust (JNPT) to some five destinations as part of the direct port delivery (DPD) scheme introduced by the country’s busiest container port last year to speed-up imports and cut time and costs.

Privately held firms PinkCity Logistics Ltd, JWC Logistics Pvt Ltd, Royal Translines Pvt Ltd, BLR Logistiks (I) Ltd, CJ Darcl Logistics Ltd, Sahyadhri Logistics Pvt Ltd, Vora Trans Freight Services Pvt Ltd, Ekta Transport Co, TAZ Logistics Ltd, Apana Logistics Pvt Ltd and RR Shipping Pvt Ltd are the others that have applied for India’s biggest transport tender issued by JNPT.

Each bidding group comprise a large number of transporters and each of them have applied for multiple routes.

“It’s a new initiative to change the logistics business at JNPT to deliver containers very efficiently,” JNPT Deputy Chairman Neeraj Bansal told BusinessLine , adding that the transport operators would be in place by the beginning of 2018.

The “excellent response to the tender from the best players in the industry” has proved that JNPT’s game plan to work out a “holistic solution” through the participation of a large number of transporters, including smaller players, by including necessary conditions, has worked.

JNPT is expected to handle 4.8 million TEUs by March 2018. “The volume is so huge that if we frame the tender for single players for each route and we don’t factor in the participation of smaller players, then only 4-5 players might have applied, thereby hijacking the tender and price. Then, the purpose of running the tender will be defeated,” Bansal said.

If the tender costs are higher than the prevailing market price, importers will not take the transport solution.

So, the old situation of non-direct port delivery – routing cargo through container freight stations — will continue, he noted.

The purpose of the tender, according to Bansal, is to re-organise the existing players. “Today, they are not working in an organised fashion. Today, transport consortia are working, but there is no transparency and no level-playing field.

“Depending on the demand and supply situation, transporters are squeezing the trade… condition on the ground is very chaotic. There is no clarity of thought process. This tender brings that clarity,” Bansal said.

A sustainable transport model in JNPT will work only if the local community/people, large transporters and single truck owners are included.

If you take that inclusive approach, it will be viable. This way, we can de-congest the port’s eco-system and it will be a win-win situation for everybody. That’s why we have not put stiff conditions on truck ownership and allowed bidders to aggregate tractor trailers, he said.

JNPT is looking to adopt a cheaper and more efficient logistics solution model so that importers willingly align with the thought process. “While doing so, we will keep the local community happy, re-arrange the local business in a more scientific, business-friendly manner, provide assured business to transporters over a longer period, facilitate end-to-end delivery of containers with transparency and certainty in cost of transaction,” Bansal added.

The transporters can “negotiate the rates” with the customers because the rates finalised through the tender will be ceiling rates.

“The importers will know in advance that moving containers through a particular transporter will cost a certain definite amount; nothing more, irrespective of the supply-demand situation. The transport solution will bring stability to the abnormal/seasonal factors that typically affects the supply chain and pricing,” he said.

All the bidding groups have taken on board information technology partners to develop a digital platform, which apart from allowing customers to check the location of the containers and ensure safety of cargo, will also display the rate so that the transporters cannot charge more.

If somebody charges more than the rate discovered through the tender process, customers can go to JNPT where there will be a grievance cell to address their problems, Bansal stated.

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