Inland Container Depots and Container Freight Stations

Introduction
An Inland Container Depot (ICD)/Container Freight Station (CFS) may be defined as a common
user facility with public authority status equipped with fixed installation 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, and temporary storage for onward transit and
outright export. Transshipment of cargo can also take place from such stations.

Functionally, there is no distinction between ICD and CFS as both are transit facilities, that offer
services for containerization of break bulk cargo and vice-versa. These could be served by rail
and/ or road transport. An ICD is generally located in the interiors of the country away from the
servicing ports. CFS, on the other hand, is an off dock facility located near the servicing ports,
which helps in decongesting the port by shifting cargo and customs related activities outside
the port area. A CFS is largely expected to deal with break-bulk cargo originating/terminating in
the immediate hinterland of a port and with rail-borne traffic to and from inland locations.

Keeping in view the requirements of the Customs Act, and need to introduce clarity in
nomenclature, all container terminal facilities in the hinterland would be designated as ICDs.

FUNCTIONS
The primary functions of ICD/CFS may be summed up as:

1. Receipt and dispatch/delivery of cargo.

2. Stuffing and stripping of containers.
3. Transit operations by rail/road to and from the serving ports.
4. Customs clearance.
5. Consolidation and desegregation of LCL cargo.
6. Temporary storage of cargo and containers.
7. Reworking of containers.
8. Maintenance and repair of container units.

The operations of ICDs/CFSs revolve around the following centers of activity:-

1. Rail siding (in case of a rail-based terminal): It is the place where the container trains are
received, dispatched, and handled in a terminal. The containers are loaded on and unloaded
from rail wagons at the siding through overhead cranes and/or other liofting equipments.
2. Container yard: It is the stacking area where the export containers are aggregated prior to
dispatch to port, the import containers are stored till Customs clearance, and empties await
onward movement. Likewise, some stacking areas are earmarked for keeping special
containers such as refrigerated, hazardous, overweight/ over-length, etc. it occupies the
largest area in the ICD/CFS.
3. Warehouse: It is a covered space/shed where the export cargo is received, import cargo is
stored/delivered, containers are stiffed/stripped or reworked, LCL exports are consolidated
and import LCLs are unpacked, and cargo is physically examined by the Customs. The export
and import consignments are generally handled either at separate areas in a warehouse or
in different nominated warehouses/sheds.
4. Gate complex: The gate complex regulates the entry and exists of road vehicles carrying
cargo and containers through the terminal. It is a place where documentation, security, and
container inspection procedures are undertaken.

BENEFITS

The following benefits are envisaged from an ICD/CFS

1. Concentration points for long distance cargoes and their unitization.

2. Services as a transit facility.
3. Customs clearance facility available near the centres of production and consumption.
4. Reduced level of demurrage and pilferage.
5. No customs required at gateway ports.
6. Issuance of through bill of lading by shipping lines, hereby resuming full liability of
shipments.
7. Reduced overall level of empty container movement.
8. Competitive transport cost.
9. Reduced inventory cost.
10. Increased trade flows.

REQUIREMENTS FOR SUCCESSFUL ICD/CFS

Prior Survey

For the ICD/CFS to be successful, reduction in total transport cost is a prime criterion as there is
a possibility of marginal increase in total handling cost per box on origin-to-destination basis.
This underlines the need for sound economic justification for setting up ICD/CFS through a
carefully evaluated traffic likely to be handled at the proposed facility. A survey/feasibility study
must precede its setting up and copy of the report should invariably accompany the application
for such a facility. Data for carrying out analysis could be from secondary sources and field
observations structured over time and space. The latter is more realistic and truthful. Prior
discussions must be held with exporters, shipping lines, freight forwarders, port authorities,
concerned Commissioners of Customs/Excise, etc., and their point of view should be fully
reflected in the report.

Important factors for the traffic flow between inland centers of production and orts need to be
analyzed with reference to:

 Commodities
 Directional-split
 Proportions of LCL and FCL
 Forecast of future growth
 Modes of transport available
 Possible reduction in tonne per kilometer
 Box per kilometer costs

ECONOMIC FEASIBILITY

The facility has to be economically viable for the management and attractive to users, to the
railways for full train load movements, to other transport operators, seaports, shipping lines,
freight forwarders, etc. and these must have certain minimum amount of traffic. The
prospective entrepreneurs are, therefore, strongly advised to study very carefully the viability
of the project from the TEU traffic availability point of view.

In the background of the rowing international trade, the infrastructure facility may have to
precede the actual generation of demand. This is particularly important as such facilities have a
long gestation period for being fully operationalised. Through it is not proposed to lay down any
minimum TEU figures as part of the criteria for approval of ICDs/CFSs, the following are
suggested as indicative norms:

 For ICD: 6000 TEUs per year (two way)

 For CFS: 1000 TEUs per year (two way)

LAND

The minimum area requirement for a CFS would be one hectare and for ICD four hectares.
However, a proposal could also be considered having less area on consideration of
technological upgradation and other peculiar features justifying such a deviation.

DESIGNS AND LAYOUT

The design and layout of ICD/CFS should be the most modern state-of-the-art equipped with
mechanical/electrical facilities of international standards. Key to a good layout is the smooth
flow of containers, cargo, and vehicles through the ICD/CFS. The design and layout should take
into account the initial volume of business, estimated volume in 10 years horizon, and the type
of facilities the exporters would require. The initial layout should be capable of adapting to
changing circumstances. The design should broadly encompass features such as siding,
container yard, gate house and security features, boundary wall, roads, pavements, office
building, and public amentities. The track length and number of tracks should be adequate to
handle rakes and for stabling trains where relevant.

The perimeter fencing and lighting must meet the standards required by the Customs
authorities. The gate being the focal point of site security should be properly planned.

The administration building is the focal point of production and processing of all documentation
relating to handling of cargo and containers and its size will be determined by the needs of
potential occupants. Fixed provisions should be made for sanitation facilities and possibly a
food service facility.

At the ICDs/CFSs a good communication system, computerization, and EdI connectivity are
essential. The following infrastructure should be available:

1. Provision of standard pavement for heavy-duty equipment for use in the operational
and sacking area os the terminal. In cases where only chassis operation is to be
performed, the pavement standard could be limited to that of a highway.
2. Office building for ICD. Customs office, and a separate block for user agencies equipped
with basic facilities.
3. Warehousing facility, separately for exports and imports, and long-term storage of
bonded cargo.
4. Gate complex with separate entry and exit.
5. Adequate parking space for vehicles awaiting entry to the terminal.
6. Boundary wall according to standards specified by the customs.
7. Internal roads for service and circulating areas.
8. Electronic weighbridge.
9. Computerized processing of documents with capability of being linked to EDI.

EQIPPING THE ICD/CFS

ICD/CFS would select most modern handling equipment for loading/unloading of containers
from rail flats, chassis, their stacking, movement, cargo handling, suffing/destuffing, etc. the
following minimum equipment should be made available:

1. Dedicate equipment such as lift truck, straddle carrier, rail mounted yard gantry crane,
and rubber-tyred yard gantry crane of reputed make, in good working condition, 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.
2. Terminals resorting to purely chassis-based operations do not require dedicated box-
handling equipment. However, the chassis-based operations should be restricted to
CFSs proposed to be set up near ports.
3. Small capacity (2-5 tons) forklifts must be provided for cargo-handling operations in all
terminals.

Rail Head ICDs

The parties will be required to provide at their own cost all infrastructure facilities such as land,
track, handling equipment for containers, and maintenance of assets including track, rolling
stock, and so on. As per extanct railway rules applicable to private sidings. The cost of the
railway staff would be borne by the party as per the prevailing government policy.

Tariff

The tariff structure and costing should be worked out along with the feasibility study and
information provided with the application.

General

The main function of an ICD/CFS being receipt, dispatch, 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 should have up-to-date and, where possible, on-
line, real time information about al the containers, etc., to meet the requirements of
customers, administration, railways, and so on. As far as possible, these operations shall be
through electronic mode.
PROCEDURE FOR APPROVAL AND IMPLEMENTATION

1. Proposals for setting up ICD/CFS will be considered and cleared on merits by an Inter
Ministerial Committee (IMC) for ICDs/CFSs, which consists of officials of the Ministers of
Commerce, Finance, Railways, and Shipping. Views of the state governments as
necessary would be obtained.
2. Ten copies of application in enclosed from should be submitted to the Infrastructure
Division in the Ministry of Commerce, Udyog Bhavan, New Delhi. Ten copies of
feasibility reports mentioned in the guidelines must accompany the application.
3. The applicant should also send a 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 Ministries of surface Transport and Commerce.
4. The applicants are also requested to familiarize with the statutory Custom requirements
in relation to bonding, transit bond, security insurance and other necessary procedural
requirements, and cost recovery charges payable before filing the application.
5. 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.
6. 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.
7. 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. Therefore, areport would be
submitted to IMC to consider the extension for a further period of six months. The IMC
may consider extension or may to withdraw the approval granted.
8. The applicant, after receipt of approval, shall send the quarterly progress report to the
Ministry of Commerce. There formats for sending the quarterly/annual report shall have
to be submitted to the Department of Commerce through electronic mode as well as
through hard copy.
 9. 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.
10. The approval will be subject to cancellation in the event of any abuse or violation of the
conditions of approval.
11. The working of the ICD/CFS will be open to review by the IMC.

CONCOR-THE MULTIMODAL LOGISTICS PROFESSIONALS

Ever since globalization transformed the transport sector, national boundaries have become
permeable to penetration by trade, creating the needs for flexible transport solutions.
Intermodalism and containerization were the by products of this era and were poised to
tansformation transport of general cargo, moving it ‘seamlessly’ through sea nad land arteries.
Forty years ago, the physical process of exporting or importing goods was arduous. Goods
needed to be transported by lorry to the port, unloaded into a warehouse, and then reloaded
into the ship ‘piece by piece’.

Malcolm McLean’s idea of containerization changed the basics of cargo transport by

standardizing the dimensions of the container and simultaneously improving the productivity of
ports by mechanizing handling of container-carrying ‘cellular ’ ships and reducing their handling
to a few hours only. Unitization helped elimination of multiple handling of cargo and made
transfers quick, cheap, and easy. As containerization came tp stand for ‘cargo care’, it grew by
leaps and bounds the world over.

The Indian Railway’s strategic initiative to containerize cargo transport put India on the
multimodal map for the first time in 1966. Given the continental distances in India, rail
transport could be the cheaper option for all cargo over medium and long distances, especially
if the cost of inter-modal transfers could be reduced. Containerizing multi-modal door-to-door
transport provided the ideal solution to this problem. It was this idea that saw the Indian
railways entering the market for moving door-to-door domestic cargo in special DSO containers
starting in 1966.

Though the first ISO marine container had been handled in India at Cochin as early as 1973, it
was in 1981 that the first ISO container was moved inland by the Indian Railways to the
country’s first Inland Container Depot (ICD) at Bangalore, also managed by the Indian Railways.

Expansion of the network to 7 ICDs by 1988 saw increase in the handling of containers, and
along the way, a strong view had emerged that there was a need to set up a separate pro-active
organization for promoting and managing the growth of containerization in India.
CONCOR was incorporated in March 1988 under the Companies Act, and commenced operation
from November 1989 taking over the existing network of seven ICDs from the Indian Railways.

The company was set up with the objective of developing multi-modal logistics support for
India’s international and domestic containerized cargo and trade. The task was to provide
customers with the advantages of direct interaction and door-to-door services that formed the
backbone of road transport, while capitalizing on the robust and more economical option of rail
movement on the Indian Railways network.

CONCOR currently provides the only means by which shippers may obtain containerized freight
transportation by rail. Through rail is the mainstay of its transportation plan, road services are
also provided according to market demand and operational exigencies. It is also operates
container terminals across the country to cater to the needs of the trade, whether in the
export-import or the domestic business.

Strength of CONCOR

CONCOR’s main strengths can be characterized as:

1. Its relatively undisputed position as sole-provider of rail-hauls for containers.

2. Its ability to provide modal choice according to the needs of the shipper and lead from
the port.
3. Its strong relationship with the Indian Railways coupled with an MoU providing for
guaranteed transits on ‘linear corridors’.
4. The ‘right of way’ available to its ‘carrier’ Indian Railways, where road is plagued by poor
physical infrastructure and incessant waits at check posts.
5. A dedicated network of state-of-the-art terminals across the country to capture traffic at
the production/consumption centres.
6. A distinct cost advantage offered by CONCOR CFSs to users by virtue of their location in
the ICD premises.
7. Excellent manpower resource: professional management team, experts trained in
multimodal logistics, and learn manpower.

Mission

The mission of CONCOR is to provide efficient and reliable multimodal logistics support for the
sub-continent’s export-import and internal trade and commerce, and to ensure growing
shareholder value by:
 1. Maintaining a high growth rate
2. Consolidating their status as market leader
3. Enhancing their commitment to customer satisfaction
4. Maximizing return on capital employed

Handling Equipment

CONCOR has generally followed a policy of organizing specialized cargo/container-handling

services by development of state-of-the-art equipment on contractual basis. In addition, at ICD
Tughlakabad, in Delhi, which is the company’s flagship terminal, they also own, operate, and
maintain the most modern and sophisticated handling equipments such as a rail mounted
gantry (RMG), rubber tyre gantries (RTGs), and loaded and empty handling reach stackers.

Wagons

After starting operations with makeshift container wagons that were provided by the Indian
Railways, CONCOR started acquiring state-of-the-art high speed container flats (BLC wagons)
capable of running at 100 kmph. Since last 3 years, these have been progressively introduced
on major container circuits in the last three years, as a result of which transit times have
reduced and service quality has shown considerable improvement. 1900 such wagons are
already deployed, and the company plans to add to that fleet every year to carter to the growth
in business as well as to replace outworn rolling stock. It has also purchased some 1300
container flat wagons from the Indian Railways, which have been since upgraded and
retrofitted to also provide improved service quality and better transit times.

Infotech

As part of their thrust towards better service quality, they have put a great deal of emphasis on
the development of advanced information systems. The first such system, the Container and
Cargo Logistics System (CCLS) went on line at our IC, Tughlakabad as early as 1994. To facilitate
operations and to maintain inventory records, most of their terminals are well equipped with
advanced Management Information Systems. They are also in the process of seting up a
company-wide satellite based intranet, which will be used to run standard and centralized
terminal management systems for both the domestic and Exim traffic streams.