Logistics

To reach containers to exporters faster, govt mulls rail movement of empties

P Manoj Mumbai | Updated on September 08, 2021

Shipments hit by shortage of boxes; returns by road not fast enough

The government may not have a handle on the steep freight rates, but it can speed up movement of empty containers from ports to the hinterland for loading export goods and stop empty boxes from being taken out of the country to help improve the availability of containers. India’s exporters are facing a huge shortage of empty containers in the wake of disruptions in the global supply chain.

“There is hardly anything we can do on freight rates,” said a source in the Ministry of Ports, Shipping and Waterways.

The government is veering around to the view that all empty containers from ports to hinterland locations in the North should move by rail only, which typically takes about three days from the western region.

How boxes move

Some 25- 35 per cent of the import containers head for the northern hinterland after being cleared of the goods. Upon landing at one of the west coast ports, some of the import containers are de-stuffed at warehouses and the empties are handed over to transporters to be hauled to the hinterland for loading export cargo. The shipping lines pay as little as possible to the transporters for the trip.

To recover their cost, the transporters pick local cargo and drop them at various locations en route to the inland container depots (ICD) in the North nominated by the shipping lines for delivering the empty container.

“This trip takes about two weeks,” says TS Ahluwalia, President, Northern India Shipper Association. “If the empty containers are moved by rail, they can reach the northern hinterland in three days,” he says. This mode is also cheaper.

Concor scheme

From September 1, the state-run Container Corporation of India Ltd (Concor) introduced a volume-based rebate on rail freight for repositioning of empties in a bid to ensure sufficient availability of containers at hinterland ICDs to boost exports and cut logistics costs.

Concor said the existing scheme for repositioning of empty containers from gateway ports to hinterland terminals with a rebate of 50 per cent on rail freight will continue till March 31. The scheme has been extended to repositioning of empties from portside Concor container freight stations (CFSs) to ICDsalso for export purposes, the company said in a trade notice.

Exporters have also urged the government to extend the time limit for keeping empty containers in the country without paying import duty from 6 months to 12 months.

Currently, empties can be kept in India for six months, per a convention followed by the Customs Department. Shipping lines take them out just before the expiry of six months to avoid the import duty.

Published on September 07, 2021

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