Centre planning to reduce dry ports in India to promote direct port delivery

If shipping ministry has its way, dry ports could soon be a thing of the past in India, with plans to cut down their numbers to promote direct port delivery.

“The opinion now is that, in order to ease out business, instead of taking delivery from dry ports, why don’t we take delivery from the main port itself,” an official in the know of the matter said, requesting anonymity.

Dry ports or inland ports are “inland intermodal terminal” directly connected to a sea port via road or rail. They act as a centre for the transshipment of sea cargo to inland destinations and provide storage facility for them.

Union ministry of commerce and industry, in January, proposed to do a “comparative assessment of regulatory mechanism” and assess laws related to dry ports in the country. Reports suggested that areas under scanner included “subsidies received” by these ports and their “funding pattern”.

It has now been learnt that both, commerce and shipping, ministries are of the view that India could do away or at least reduce the number of dry ports in the country to facilitate direct port delivery (DPD). There are close to 300 dry ports in India.

“The thinking that is now going on is that instead of proliferating these dry ports, let us make the business easier… There is no need for so many dry ports or container freight stations (CFS) for that matter,” said the official.

He said that Centre now thinks there should be lesser dry ports, CFS or inland container depots (ICD) so that there is “more of direct port delivery and direct port entries”.

“Both the ministries are working in that direction,” he added.

Direct port delivery (DPD) gives leeway to importers to take direct delivery of the containers from port terminals and take them to their factories against a longer procedure where s/he had to first go to a CFS and from there to factories. This assures the consignee that cargo clearance would be received in less than 48 hours contrary to an average of seven days if routed through a CFS.

Sector analysts anticipate that "the introduction of DPD has affected the functioning of CFS and their profitability" even as there is "excess capacity built up" at key ports like JNPT.

Experts from the industry, however, believe that Centre can't do away with dry ports, CFS or ICD as they are the most suitable form of warehousing for supporting export-import operations at landlocked ports.

"The purpose of ICD can't be understated as there is a specific purpose that they fulfill, more importantly in land locked places which need exim cargo evacuation," an expert said.

They believe that "only those dry ports will survive who have liner tie-up, good value added service offering".

Jawaharlal Nehru Port Trust (JNPT) has been using DPD since February 2016 and handles close to 39 per cent of the total cargo traffic through it. As per government data, about 1,600 importers have registered themselves under the scheme.

Simplification of ports’ operation coms on the back of Centre’s flagship programme, Sagarmala, focuses on port development and modernisation, port-led industrialisation, port connectivity and coastal community development. The Rs. 8 trillion programme is to be completed till 2035 and has 415 projects under its ambit.