Customs to pilot direct inland delivery of containers at Whitefield ICD

P Manoj Mumbai | Updated on February 20, 2020

The plan is to model it on the direct port delivery scheme at seaports

The Customs Department has picked Whitefield near Bengaluru, where southern India’s largest inland container depot (ICD) or dry port is located, to pilot a direct inland delivery (DID) concept to cut time and costs for cargo imported in containers. The concept is modelled on the direct port delivery (DPD) scheme introduced at the country’s seaports.

“The first experiment of the direct inland delivery concept will be carried out at the Whitefield ICD, whereby the same facility (available under DPD) will be available at an ICD,” said Baswaraj Nalegave, Commissioner of Customs (City and ICD), Bengaluru.

“If a container is brought to ICD Whitefield from VO Chidambaram Port Trust (VOCPT) in Thoothukudi (Tamil Nadu), for example, and if for some reason, the importer does not have the status of an authorised economic operator or DPD facility, you can come to us and we will give you direct inland delivery at the ICD,” Nalgave said.

Cutting costs and time

Under DPD, import containers are delivered directly to pre-approved clients at the port rather than made to wait at a container freight station (CFS) located outside for clearance. This reduces cargo dwell time and costs for shippers. DPD was first implemented at Jawaharlal Nehru port, India’s biggest container gateway, and later extended to all the gateway ports, including Chennai port and privately-run Mundra port.

DID will be applicable for ICD-bound containers only after entry inwards has been granted at the gateway port.

From a slow start about two years ago, the share of DPD in the overall imports has crossed 40 per cent, from about 5 per cent.

A CFS is an off-dock facility licensed by the Customs Department to help de-congest a port by shifting containerised cargo and for carrying out Customs-related activities outside the port area. An ICD also provides similar services; the only difference is that it is located in the hinterland (cargo generating and distributing areas), far away from the ports.

The DID procedure

Under the DID scheme, importers will have to file the import declaration before the arrival of the goods from the gateway ports at the ICD. The importer will pay the duties accordingly or on a deferred payment basis.

Currently, custodians at ICDs offer a free period to importers before they clear containers carrying imported goods. The tariff structure for incentivising importers to opt for DID, and the extra charges for not clearing the DID container within 24 hours of the out-of-charge (granted) by the Customs Department, are being worked out.

The DID concept is yet another effort by the Centre to improve India’s ranking in Trading Across Borders (TAB) as part of the World Bank’s Ease of Doing Business index. India has been improving consistently in the rankings over the past five years, and one of the key drivers has been the initiatives under TAB, where India jumped substantially from 146 to 68 in the last two years. The Centre has set a target of reaching the top 50 ranks in TAB this year.

The study for measuring trading across borders/ease of doing business were so far restricted to the Jawaharlal Nehru Port Trust (JNPT) and the Tughlakabad ICD (near Delhi), the country’s biggest dry port.

“This year, the coverage will be extended to the Whitefield ICD also,” Nalgave added.

Published on February 20, 2020

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