Intro

Direct Port Delivery: India’s move to cut import delivery time

Direct Port Delivery (DPD) was launched in India in 2016, allowing a small subset of
importers to clear cargo straight from the port within 48 hours of arrival. It is a viable
alternative to the CFS (container freight station) approach, in which import cargo is
channelled to an off-site CFS and delivery takes around three times as long. The goal of DPD
is to save importers time and money by decongesting ports, facilitating commerce and
improving India's Ease of Doing Business ranking. The DPD model was first introduced at
the Jawaharlal Nehru Port Trust (JNPT) – India’s busiest container gateway – and has since
been extended to ports across India.
Importers can complete customs clearance and receive delivery of their shipment at the port
within a certain time limit (typically 48 hours) of the shipment being offloaded under the
DPD model. If the importer does not accept delivery within this time frame, the consignment
is transferred en-bloc (in its whole) to a pre-designated CFS. The importer must next follow
the CFS model, which calls for cargo delivery to take between seven and nine days.
The following flowchart depicts the steps in both models, as well as how DPD eliminates
three stages in the CFS model:

Source: https://www.cogoport.com/blogs/direct-port-delivery

Benefits of DPD
 It reduces import cargo delivery time by five to seven days.
 Importers save money on storage, ground rent, CFS handling, terminal-to-CFS
transfer, and carrier detention costs. JNPT predicts a Rs 10,000-20,000 savings per
container.
 The DPD clearance and delivery service is available 24 hours a day, seven days a
week.
  Faster delivery implies faster container turnaround for shipping lines.

Who is eligible for DPD?

Only importers who fulfil these government-prescribed guidelines can avail of this facility:
1. Importers who have been granted Authorised Economic Operator (AEO) status. An
AEO is defined by the World Customs Organization as "a party participating in the
international movement of goods in whatever role that has been authorised by or on
behalf of a national customs administration as conforming with WCO or equivalent
supply chain security requirements." Manufacturers, importers, exporters, brokers,
carriers, consolidators, intermediates, ports, airports, terminal operators, integrated
operators, warehouses, and distributors are among those who fall under this category.
The Central Board of Indirect Taxes and Customs runs India's AEO programme
(CBIC).
2. Importers having a proven track record of compliance and an annual import volume
of 25 Full Container Load (FCL) TEUs through a specific port or otherwise.
3. Importers that do not meet the first two requirements can still qualify for DPD if their
"imports have enjoyed a continuous pattern of customs risk facilitation" and/or if they
"offer evidence that they would be able to pick up containers directly from the
terminal." This relief is intended for micro, small, and medium-sized businesses
(MSMEs). The chief customs commissioner has the authority to accept such an
application.
Additionally, DPD is open to shipments only if they fulfil these conditions:
1. If the consignment is FCL.
2. If it is covered by an RMS-facilitated Bill of Entry on a "no assessment no
examination" or "assessment but no examination" basis (RMS is the Risk
Management System used by Indian Customs).
3. If the importer has a terminal pre-deposit account (PDA). The account should have
enough money in it to cover terminal handling fees.
4. If the importer has arranged their own transportation arrangements to receive cargo.
5. If the importer has completed any additional formalities required by the relevant
customs zone.

Who isn’t eligible?

1. Importers who have been charged with misdeclaration of goods,
concealment/diversion of imported items, or duty evasion in the previous five years.
2. Importers risking prosecution under the Customs Act of 1962
3. Those importing products are subjected to a thorough scrutiny.
4. Those who import Less-than-Container-Load (LCL) cargo.
 Challenges
 Lack of space/infrastructure: According to industry insiders, ports like JNPT were
developed on the CFS model in constrained areas. In addition, Adani Hazira Port
ceased DPD operations in April owing to a pile-up of DPD cargo during the Covid-19
shutdown period, demonstrating the absence of infrastructure. According to the study,
this is because Hazira is not connected by train. As a result, the containers could not
be relocated en masse by rail to CFSs, as had been done to relieve congestion at JNPT
and the Chennai port.
 Lack of uniformity: Traders have frequently complained about a lack of consistency
in rates and free hours throughout Indian ports. Importers, for example, have 48 hours
at JNPT and 72 hours at the Chennai port to receive delivery. In addition, the private
terminals at JNPT tax a moving charge on DND cargo, which varies per terminal.
There is no similar fee at the Chennai and Haldia ports.
 Lack of choices: Voltas wanted to be removed from the DPD list in 2017, claiming
that its Uttarakhand facility could only handle 15 containers per day, although the
model required it to take possession of all 50 containers arriving by ship. Similarly,
luggage manufacturer VIP Industries stated that if it did not accept prompt possession
of its shipment, it would be transported to a CFS chosen by the port rather than one of
its choosing.
 Threat to CFS: When DPD was implemented in 2016, the 33 CFSs at JNPT were
concerned about losing business and jobs. Some reduced the size of their employees.
However, this issue appears to have been resolved, and CFSs continue to be an
important component of India's worldwide commerce. According to JNPT, boosting
cargo volumes at ports will ensure that CFSs get a fair share of business. In addition,
because to a lack of warehouse space near the cargo owners' industries, a significant
amount of DPD freight is still moved to CFSs for storage after delivery.

https://www.cogoport.com/blogs/direct-port-delivery
 Chapter _ - Data Analysis
The following tables contains the data from E.I. Dupont India Pvt. Ltd. Making comparison
between the years of using the CFS modal for their import consignments. In 2015,