ROLE OF DRY PORTS

IN TRADE LOGISTICS

Dr. Ram Singh

Associate Professor
Export Import Procedure, Documentation &
Logistics
Indian Institute of Foreign Trade
New Delhi
Email: ramsingh@iift.ac.in
 DRY PORTS: WHAT THEY ARE
 “Dry port is a yard which is needed to place the containers;
conventional bulk cargo and break bulk cargo usually to be
exported or imported and is connected to a seaport by rail or
road”.

 ICDs/CFSs are located away from a gateway port, providing

facilities for overseas trade. ICDs/CFSs are located in close
vicinity of production center or place of consumption in
country hinterland having rail & road linkages to gateway ports.

 ICDs/CFSs are common user facility meant for handling and

temporary storage of importable/exportable cargo;
stuffed/unstuffed containers for clearance by Customs for
home consumption, warehousing, onward transit to another
locations.
DRY PORTS (ICDS/CFSS) : SIGNIFICANCE & RATIONALE
 ICD are larger and virtually dry ports but CFS are generally on
off-dock facility close to gateway port which is established so as
to decongest gateway port by shifting cargo and customs-
related activities outside the port to these Container Freight
Stations (CFS).

 In ; there are almost 67 dry ports (ICDs/CFSs) in close vicinity

of gateway ports and in total there are 268 dry ports spread in
country industrial hubs. In addition to these ICD/CFS, there
are around 136 LCS spread across India’s international
borders with neighboring countries.
DRY PORTS (ICDS/CFSS) : SIGNIFICANCE & RATIONALE

 Popularization of containerized trade (the box:

20’*8’*8.6’) has transformed international trade and has
helped reduce the transit time.

 Dry port compensates the disadvantages of having

industrial hubs in country industrial hubs. ICDs/CFSs
have gained increased demand in view of clustering of
economic activities at Special Economic Zones at various
locations in the country.
ICDS/CFSS: HUB & SPOKE MODEL
 CARGO FEEDING FLOW DIAGRAM FOR
ICDS & MARITIME PORTS FORM CFS

CF
S-1 CF
S-1

Inland
CFS Container
-2 Depot

CF
S-1

CFS
-3
TRANSPORTATION TO BECOME SEAMLESS AND "DOOR-TO-DOOR"
 CONCEPT OF DRY PORTS
 ICDs/CFSs are located away from a gateway port, providing facilities for overseas
trade.

 ICDs/CFSs are located in close vicinity of a production centre or place of

consumption in the country hinterland, having rail and road linkages to gateway
ports.

 ICDs/CFSs are common user facilities, meant for handling and temporary
storage of importable or exportable cargo, stuffed or unstuffed containers for
clearance by customs for home consumption, warehousing, and onward transit
to other locations.

 ICDs are larger and virtually dry ports but CFSs are generally on off-dock facility
close to the gateway port, which is established so as to decongest gateway ports by
shifting cargo and customs-related activities outside the port to these CFSs.
CONTD…… CONCEPT OF DRY PORTS
 ICDs are focal points of the country’s trade as they receive stuffed containers from
the satellite CFS in ready condition to be transported to the sea ports for exports.

 The custom clearance procedure at ICDs/CFSs enables exporters and importers to

complete customs clearance formalities with ease and in reduced cost and time.

 In order to establish India as centre for global trade, free trade and warehousing
zones are set up and are governed by SEZ Rules 2006.

 The criteria and procedure for setting up ICDs/CFSs are framed by the Ministry of
Commerce and Industry, Government of India.

 There have been regional imbalances in setting up of dry ports as majority of them
are located in Southern and Western India. East and Central India does not have
many dry ports mainly due to low industrial and economic activity.
 CONCEPT OF DRY PORTS
 A common user facility with public authority status equipped with fixed
installations and offering services for handling and temporary storage of
import/export laden and empty containers carried under customs control and with
Customs and other agencies competent to clear goods for home use, warehousing,
temporary admissions, re-export, temporary storage for onward transit and
outright export. Transhipment of cargo can also take place from such stations.”

 Customs Act 1962 has made a distinction between ICD and CFS whereby it define
the ICD as “the places which alone shall be inland container depots for the
unloading of imported goods and the loading of export goods or any class of such
goods” and remained silent on appointment of Container Freight Stations thus
concluding that “all containers terminal facilities in the hinterland would be
designated as ICDs” Ibid vide Section 7 (aa) of Customs Act 1962 and inserted by
Finance Act No. 11 of 1983, w.e.f. 13th. May, 1983.
CONCEPT OF LAND CUSTOM STATION
 The LCSs are primarily gateways for transit of
goods, services and human beings between the
neighbouring countries. India shares a long border
with Pakistan, China, Nepal, Bhutan, Myanmar and
Bangladesh. There are 136 Notified Land Customs
Stations on the border of these countries.

NATURE OF CARGO IN INTERNATIONAL TRADE LOGISTICS
Automobiles Cargo Ro-Ro Vessel

Container
Break-Bulk Cargo
Ship

Ships with
Bulk Cargo
Hull

Containerized
TYPES OF CARGO Neo-Bulk Cargo Ships

Containerized
Containerized Cargo
Ships

Open Dock
ODC/Project Cargo
Ships

Liquid Cargo Tanker Ship

CONTAINERIZATION : A FORCE BEHIND EVOLUTION OF DRY PORT
 On April 26, 1956 the first container ship called the Ideal-X moved 58 containers from
Newark to Houston in the United States. She was a converted WW2 oil tanker and this
operation was the brainchild of a trucking magnate called Malcolm Purcell McLean. From
this day forward shipping was changed forever.

 There are about 22 million TEU (twenty foot equivalent units) in use today. The numbers
are growing roughly by 10% every year.

 Containers are built to exact standards monitored by the ISO (International Standards
Organisation) so that they are able to be carried by ship, truck or rail with no modifications.
When you hear the term intermodal, this is what this is referring to.

 The largest container ship built to date is the Emma Maersk. She can carry 15,000 teu and
has a crew of only 13 people. She has a top speed of an amazing 55.8 kilometres/hour.
 CONTAINERIZATION : A FORCE BEHIND EVOLUTION OF DRY PORT:
SIZE & DIMENSIONS OF STANDARD CONTAINERS
40′ HIGH-CUBE 45′ HIGH-CUBE
20′ CONTAINER 40′ CONTAINER
CONTAINER CONTAINER

IMPERIAL METRIC IMPERIAL METRIC IMPERIAL METRIC IMPERIAL METRIC

LENGT
19′ 10 1⁄2″ 6.058 M 40′ 0″ 12.192 M 40′ 0″ 12.192 M 45′ 0″ 13.716 M
H
EXTERNAL
WIDTH 8′ 0″ 2.438 M 8′ 0″ 2.438 M 8′ 0″ 2.438 M 8′ 0″ 2.438 M
DIMENSIONS

HEIGHT 8′ 6″ 2.591 M 8′ 6″ 2.591 M 9′ 6″ 2.896 M 9′ 6″ 2.896 M

LENGT
18′ 8 13⁄16″ 5.710 M 39′ 5 45⁄64″ 12.032 M 39′ 4″ 12.000 M 44′ 4″ 13.556 M
H
INTERIOR
WIDTH 7′ 8 19⁄32″ 2.352 M 7′ 8 19⁄32″ 2.352 M 7′ 7″ 2.311 M 7′ 8 19⁄32″ 2.352 M
DIMENSIONS

HEIGHT 7′ 9 57⁄64″ 2.385 M 7′ 9 57⁄64″ 2.385 M 8′ 9″ 2.650 M 8′ 9 15⁄16″ 2.698 M

WIDTH 7′ 8 ⅛″ 2.343 M 7′ 8 ⅛″ 2.343 M 7′ 6" 2.280 M 7′ 8 ⅛″ 2.343 M

DOOR
APERTURE
HEIGHT 7′ 5 ¾″ 2.280 M 7′ 5 ¾″ 2.280 M 8′ 5″ 2.560 M 8′ 5 49⁄64″ 2.585 M

VOLUME 1,169 Ft³ 33.1 M³ 2,385 Ft³ 67.5 M³ 2,660 Ft³ 75.3 M³ 3,040 Ft³ 86.1 M³

MAXIMUM
66,139 Lb 30,400 Kg 66,139 Lb 30,400 Kg 68,008 Lb 30,848 Kg 66,139 Lb 30,400 Kg
GROSS WEIGHT

EMPTY WEIGHT 4,850 Lb 2,200 Kg 8,380 Lb 3,800 Kg 8,598 Lb 3,900 Kg 10,580 Lb 4,800 Kg

NET LOAD 61,289 Lb 28,200 Kg 57,759 Lb 26,600 Kg 58,598 Lb 26,580 Kg 55,559 Lb 25,600 Kg
CONTAINERIZATION : A FORCE BEHIND EVOLUTION OF DRY
PORT- TYPES OF CONTAINERS
Dry Storage Containers
Flat Rack Containers
Open Top Containers
Tunnel Containers
Side Open Containers
Double Door Containers
Reefer ISO Containers
Types Of Insulated Or Thermal Containers

Containers Tanks Containers

Cargo Storage Containers
Half Height Containers
Car Carriers
Drum
Special Purpose Containers
Special Body Containers
Intermediate Bulk Shift Containers
 Diagram: Role of ICD/CFS in International Trade Logistics

Port of INTER-COUNTRY PORT OF

IC Embarkation LOGISTICS DISEMBARKATION
D/
CF
S
REASONS FOR INCREASING ROLE OF ICD/CFS

CFS
ICD/
•Aggregation & Unitization of Long Distance
Cargo
•In-transit Storage in secure environment
•Localized Customs & Regulatory CLIENT COUNTRY
HOME COUNTRY Compliance/Clearance TRANSPORTATION
TRANSPORTATION •Reducing Pilferage & Demurrage
•Liability Transfer through issue of Bill of
Lading in Advance
•Optimization in Container Unitization
•Optimization of Transports Cost; Inventory
Cost
•Increasing Trade Flows

MANUFACTURER EXPORT/IMPORT DEPENDING ON

COUNTRY OF ORIGIN CONSUMER
 GENERAL FUNCTIONS OF ICDS/CFSS
TRANSIT OPERATIONS BY RAIL/ROAD TO AND
FROM SERVING PORTS

RECEIPT AND DISPATCH/DELIVERY OF CARGO

STUFFING AND STRIPPING OF CONTAINERS

FUNCTIONS MAINTENANCE AND REPAIR OF CONTAINER UNITS

OF
ICDS/CFSS REWORKING OF CONTAINERS

TEMPORARY STORAGE OF CARGO AND

CONTAINERS
CONSOLIDATION AND DESEGREGATION OF LCL
CARGO

CUSTOMS CLEARANCE
 SPECIFIC FUNCTIONS OF ICDS/ CFSS

• Receipt and dispatch/delivery of cargo.

ICDs
• Stuffing and stripping of containers.
• Transit operations by rail/road to and
from serving ports.
• Customs clearance.

• Consolidation and desegregation of LCL

cargo.

CFSs
• Temporary storage of cargo and
containers.
• Reworking of containers.
• Maintenance and repair of container
units.
 GENERAL BENEFITS OF ICDS/CFSS
Concentration points for long distance cargoes and
its unitization

Service as a transit facility

Customs clearance facility available near the

centres of production and consumption

Reduced level of demurrage and pilferage

BENEFITS No Customs required at gateway ports

OF Issuance of through bill of lading by shipping lines,
ICDs/CFSs hereby resuming full liability of shipments

Reduced overall level of empty container movement

Competitive transport cost

Reduced inventory cost

Increased trade flows

 SPECIFIC BENEFITS OF ICDS/ CFSS
• Concentration points for long distance cargoes and
its unitization.

ICDs
• Customs clearance facility available near the centers
of production and consumption.
• Issuance of through bill of lading by shipping lines,
hereby resuming full liability of shipments.
• No Customs required at gateway ports.

• Reduced overall level of empty container

movement.

CFSs
• Competitive transport cost.
• Reduced inventory cost.
• Increased trade flows.
• Service as a transit facility.
• Reduced level of demurrage and pilferage.
 GROWTH DRIVERS & CHALLENGES FOR ICDS/CFSS

Challanges:
• High Cost for Development of Facility
• Archaic Procedures for the movements of
cargo

Growth Drivers:
1. Growth in Port Traffic
2. Custom Clearance Activities at ICDs/CFSs
3. Higher Margins in comparison with other logistics
activities
4. Construction of Dedicated Freight Corridor
 OPERATIONS OF THE ICDS/CFSS

• The containers are loaded on and unloaded from rail wagons at the
Rail Siding siding through overhead cranes and / or other lifting equipments.

• Container yard occupies the largest area in the ICD.CFS. It is stacking

area were the export containers are aggregated prior to dispatch to
Container port, import containers are stored till Customs clearance and where
empties await onward movement. Likewise, some stacking areas are
Yard earmarked for keeping special containers such as refrigerated,
hazardous, overweight/over-length, etc.

• A covered space/shed where export cargo is received and import

cargo stored/delivered; containers are stuffed/stripped or
reworked; LCL exports are consolidated and import LCLs are
Warehouse unpacked; and cargo is physically examined by Customs. Export and
import consignments are generally handled either at separate areas
in a warehouse or in different nominated warehouses/sheds.

• A covered space/shed where export cargo is received and import

cargo stored/delivered; containers are stuffed/stripped or reworked;
Gate LCL exports are consolidated and import LCLs are unpacked; and
cargo is physically examined by Customs. Export and import
Complex consignments are generally handled either at separate areas in a
warehouse or in different nominated warehouses/sheds.
GUIDELINES FOR
SETTING UP AN
ICD/ CFS IN INDIA
 • A feasibility study must precede the setting up of all ICDs/CFSs and copy of the report should
invariably accompany the application for setting up such a facility.
• Data for carrying out analysis could be from secondary sources and field observations,
structured over time and space.
FEASIBILI • Prior discussions must be held with exporters, shipping lines, freight forwarders, port
TY STUDY authorities, concerned Commissioners of Customs/Excise etc., and their point of view fully
reflected in the report
• The analysis of traffic flows between centres of production & ports shall be analysed with
reference to the following:
• Commodities
• Directional-split (Imports/Exports)
ANALYSIS
OF • Proportions of less-than-container load (LCL) & full-container-load (FCL)
TRAFFIC • Forecast of future growth.
FLOWS • Modes of transport available.
• Possible reduction in tonne per kilometre or
• Box per kilometre costs
• The facility should be a viable unit for various stakeholders like the railways, transport
operators, seaports, shipping lines, freight forwarders etc. the guidelines stipulate certain
ASSESSME
NT OF minimum amount of traffic (measured in TEUs) for the facilities to be set up. The following are
ECONOMIC the suggested indicative norms which form a part of criteria for the approval of CFSs/ICDs of
VIABILITY at any location across India:
• For ICD – 7,200 TEUs per year (Two way)
• For CFS – 1,200 TEUs per year (Two way)
LAND • The minimum area requirement for a CFS is 1 hectare and for ICD 4 Hectares. There is
REQUIREM
ENTS
however, a clause, which allows the CFSs/ICDs to be setup on a smaller than recommended
area considering the technological upgradation and other features which could justify the
demands
 •CFS/ICDs are primarily designed for the reduction of congestion at ports and other facilities of transport and
therefore must be designed in such a way which optimizes the usage of the facility, reduces the congestion at ports
and minimizes the transaction time for transport of cargoes etc.
•The design & layout should be well equipped with mechanical & electrical facilities, preferably of international
standards.
•The design must support the smooth flow of containers, cargo & vehicles
•The design should be prepared taking into consideration the estimated first 10 years volume and type of facilities
the exporters require
•The broad design should encompass features like rail siding, container yard, gate house, security features like
boundary wall, fencing, pavements, office building and public amenities
Design & •The perimeter fencing and lighting must meet the standards required by Custom Authorities
Layouts •The administration building should be focal point of the production & production & processing of all
documentation relating to handling of cargo & containers and its size shall be determined by needs of occupants
•Sanitation and food service facilities should also be accounted for.
•Good communication systems with EDI connectivity is also essential.

• Provision of standard pavement for heavy duty equipment for use in the operational and stacking area
of the terminal. In cases where only chassis operation is to be performed, the pavement standard could
be limited to that of a highway.
• Office building for ICD, Customs office and a separate block for user agencies equipped with basic
facilities.
• Warehousing facility, separately for exports and imports and long term storage of bonded cargo.
Infrastruc • Gate Complex with separate entry and exit.
ture • Adequate parking space for vehicles awaiting entry to the terminal.
• Boundary wall according to standards specified by Customs.
• Internal roads for service and circulating areas.
• Electronic weighbridge.
• Computerized processing of documents with capability of being linked to EDI.
 • The ICD/CFS would select most modern handling equipment for loading, unloading of containers from
rail flats, chassis, their stacking, movement, cargo handling, stuffing/de-stuffing, etc.
• Following minimum equipment should be made available at ICDs/CFSs (Reach stacker may not be
mandatory):
• Dedicated equipment such as lift truck (front end loader, side loader or reach-stacker), straddle carrier,
rail mounted yard gantry crane, rubber tyred yard gantry crane, etc. of reputed make and in good
working condition (not more than 5 to 8 years old) and equipped with a telescopic spreader for
handling the 20 ft and 40 ft boxes. The equipment must have a minimum residual life of 8 years duly
certified by the manufacturer or a recognized inspection agency. An additional unit of equipment
should be provided when the throughput exceeds 8000 TEUs per annum or its multiples for lift truck
based operations.
Equipm • Terminals resorting to purely chassis-based operations do not require dedicated box handling
ents equipment. However, chassis-based operations should be restricted to CFSs proposed to be set up near
ports.
• Small capacity (2 to 5 tonnes) forklifts must be provided for cargo handling operations in all terminals.
• The main function of an ICD/CFS being receipt, despatch and clearance of containerised cargo, the need
for an up-to-date inventory control and tracking system to locate containers / cargo is paramount.
• Each functional unit of the facility (e.g. siding, container yard gate, stuffing/destuffing area, etc.) should
have up-to-date and where possible on-line, real time information about all the containers, etc., to meet
the requirements of customers, administration, railways etc.
• As far as possible, these operations shall be through electronic mode.

• Tariff structure and costing is supposed to be worked out along with the feasibility study and information
Tariffs should be provided with the application
PROCEDURE FOR
SETTING UP OF
CFS/ICDS &
IMPLEMENTATION
 •Proposals for setting up ICD/CFS will be considered and cleared, on merits, by an Inter-Ministerial Committee for ICDs/CFSs, which
Proposal/ consists of officials of the Ministries of Commerce, Finance (Department of Revenue), Railways and Shipping. Views of the State
Applicati Governments as necessary would be obtained
on/ •Application 10 copies in enclosed form should be submitted to the Infrastructure Division in the Ministry of Commerce, Udyog
Processin Bhavan, New Delhi. Application must be accompanied by 10 copies of feasibility reports mentioned in the guidelines
g

•The applicant should also send a separate copy of the application to the jurisdictional Commissioner of Customs. The Commissioner
of Customs will send his comments to the Ministry of Commerce and the Central Board of Excise & Customs (CBEC) within 30 days.
In case, the project is planned in a port town, a copy of the proposal should also be sent to the concerned Port Authority who would
furnish their comments within 30 days to the Ministry of Surface Transport and the Ministry of Commerce.
Processin •The applicants are also requested to familiarize with the statutory Custom requirements in relation to Bonding, Transit Bond,
g& Security Insurance and other necessary procedural requirements and cost recovery charges payable before filing the application
Approval •On receipt of the proposal, the Ministry of Commerce would take action to obtain the comments from the jurisdictional
Commissioner of Customs and other concerned agencies within 30 days. Wherever necessary, a copy of the proposal should also be
sent to Zonal Railway Manager, under intimation to the Ministry of Railways One copy of the proposal would also be made available
to the IMC Members for advance action. The decision of the IMC would be taken within six weeks of the receipt of the proposal
under normal circumstances

•On acceptance of a proposal, a Letter of Intent will be issued to the applicant, which will enable it to initiate steps to create
infrastructure
•The applicant would be required to set up the infrastructure within one year from the date of approval. The Ministry of Commerce
may grant an extension of six months keeping in view the justification given by the party. Thereafter, a report would be submitted
LOI/ to IMC to consider extension for a further (final) period of six months. The IMC may consider extension or may submitted to IMC to
Functrion withdraw the approval granted
ing & •The applicant, after receipt of approval, shall send quarterly progress report to Ministry of Commerce. Three formats (given as
Review annexure I to III) for sending the quarterly/ annual report shall have to be submitted to Department of Commerce through
electronic mode as well as through hard copy
•After the applicant has put up the required infrastructure, met the security standards of the jurisdictional Commissioner of
Customs and provided a bond backed by bank guarantee to the Customs, final clearance and Customs notification will be issued
•The approval will be subject to cancellation in the event of any abuse or violation of the conditions of approval
•The working of the ICD/CFS will be open to review by the Inter Ministerial Committee
 REGION AND BORDER WISE LIST OF ICDS/ CFS
AND LAND CUSTOM STATIONS IN INDIA
Region Total % of
ICDs/CF National Border No. Of LCS
Ss Dry Ports
Country
Northern 38 15%
India
Bangladesh 30
Southern 95 38%
India Bhutan 3

Western 91 36% China 1

India
Myanmar 3
Central India 10
For all countries 1
Eastern India 13 6%

Total 247 100% Total 38

 STATES WISE NUMBER OF REGISTERED CFSS/ICDS
Andhra Pradesh 13
Bihar 1
Chandigarh 1
Chhattisgarh 1
Goa 1
Gujarat 33
Haryana 9
Himachal Pradesh 1
Jharkhand 1
J& K 2
Karnataka 8
Kerala 11
Maharashtra 48
Madhya Pradesh 7
Orissa 2
Pondicherry 2
Punjab 7
Rajasthan 10
Tamil Nadu 60
Uttar Pradesh 18
West Bengal 11

Total 247
 RENT

HANDLING REVENUE
CENTERS AT WAREHOUSING

ICDS/ CFSS

MAINTENANCE &
REPAIRS
 REVENUE CENTERS AT ICDS/ CFSS
CENTERS STATUS / REMARKS

WAREHOUSING •Bonded Warehouses are typically used by the Custom Handling Agents &
shipping companies

•This segment, though important does not comprise a lucrative growth sector
within the CFS functions.
HANDLING •It is dependent on the volumes of containers handled in a CFS

•It is usually outsourced to other specialized firms providing equipment,

facilities and skilled manpower for the same

•The more efficient the handling of the containers, lesser the dwell time and
more is the volume. This increases the revenue generation of the CFSs.
Companies with efficient container handling systems and suitable technologies
can work wonders
 REVENUE CENTERS AT ICDS/ CFSS
CENTERS STATUS / REMARKS

RENT •CFS charge rent for the ground on which containers are kept. Usually the rent is based on
incremental basis. It is minimum for first few days, and increases thereafter as the number of
storage days increases. This increase in rent varies from time to time and from cargo to
cargo.

•Though the ground rents are an important source of revenue for the CFSs, they are primarily
kept as a negative covenant. As the rent increases, the profitability of the owner of cargo
decreases due to which the owners prefer to evacuate the containers as soon as possible.

•The rent is directly associated with the number of containers and as the container turnover
increases, so does the overall rent receipts.
MAINTENAN •The rise of container traffic is also determined by the type of services offered for the
CE & REPAIR
cleaning, maintenance and repair of the containers.

• This is a relatively unchartered area as there are quite a few players specifically providing
these services for the containers.
 Thank You

धनयवाद
Merci

Gracias Danke
Schon

Thank You 谢谢