More Indian ports cutting dwell times via efficiency programs

3-Sept-2018

India’s efforts to replicate the success Jawaharlal Nehru Port Trust (JNPT) achieved with its two, key supply chain reforms — direct port delivery (DPD) and direct port entry (DPE) — at other, smaller ports appears to have worked to a considerable degree.

Conceptually and in objective, DPD and DPE are akin to each other — speed up cargo flows, reduce cargo dwell times, and decrease logistics costs. Under DPD, pre-approved importers can clear their cargo directly from the wharf within 48 hours of landing at the port, whereas DPE allows shippers to gate-in their factory-stuffed goods without the otherwise mandatory “let export order” issued by customs.

Other ports see shipper demand for DPD, DPE

A new JOC.com study reveals that besides reform frontrunner JNPT, the ports of Chennai, Kolkata, Haldia, Tuticorin (V.O. Chidambaranar), Cochin, Visakhapatnam, and New Mangalore have been able to generate considerable shippers’ interest toward these ease-of-doing-business programs, following intense government pressure to increase productivity.

The April-to-July DPD percentage at top performers among these ports is as follows: Haldia, 55.64 percent; Chennai, 46.3 percent; Kolkata, 37.12 percent; Cochin, 20 percent; and Visakhapatnam, 14.3 percent.

The DPE performance at these locales during the same period is as follows: Haldia, 100 percent; Cochin, 93 percent; Kolkata, 89.39 percent; Visakhapatnam, 54 percent; and Tuticorin, 6 percent, according to data collected by JOC.com from government sources.

JNPT, which handles the majority of India’s container freight, transacted 39 percent of its import discharges, or 219,914 TEU, out of 563,847 TEU of laden imports, via DPD during the above period. The DPE percentage at port-owned Jawaharlal Nehru Container Terminal, for which data are currently available, was 80 percent during April-July, data show. JNPT also encompasses APM Terminals’ Gateway Terminals India, two facilities operated by DP World, and PSA International’s Bharat Mumbai Container Terminals, which opened in February.

Dominant, privately operated, minor ports — such as Mundra, Pipavav, and Krishnapatnam — also have lately implemented these ease-of-doing-business measures to offer intended benefits to exporter/importers and increase productivity rates.

Business model ramifications for 3PLs

At the same time, that rapid, nationwide adoption of reforms is sending shudders through the port-based, third-party logistics (3PLs) sector, as supply chain intermediaries have steadily lost ground and almost become a redundant variable regarding cargo storage and customs clearance services.

To get around those challenges, some of the leading 3PLs have strategically extended their logistics reach to emerging locations and also realigned their operations in tandem with changing market dynamics. As a result, Gateway Distriparks Ltd., which operates the largest container freight station (CFS) site at JNPT, booked respectable growth in the first fiscal quarter through the end of June, after previous declines.

“We have had growth in volume and capacity utilization levels across the group while facing increased competition. The CFS business crossed 110,000 TEUs in the quarter, adapting well to the direct port delivery [DPD] scenario,” Gateway stated.

Although that alternative, sustainable approach appears to provide a silver lining for larger players with multiple logistics locations and diversified offerings, 3PLs operating essentially on a single-port market basis are generally facing perilous times, in a substantially changed market that features more competitors.

Source: JOC.COM