In 2016, India introduced Direct Port Delivery (DPD), a system that allows a select group of importers to clear cargo directly from the port within 48 hours of arrival. It is an alternative to the CFS (container freight station) model, where import cargo is routed to an off-site CFS and delivery takes roughly three times longer. The objective behind DPD is to reduce time and cost for importers, decongest ports and, in the process, facilitate trade and improve 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. This piece takes an in-depth look at this key government initiative and how it has performed in the last four years. Read on to know:
Under the DPD model, importers can complete customs clearance of their shipment and take delivery of it at the port within a stipulated time frame (usually 48 hours) of the shipment being offloaded. If the importer fails to take delivery within this time, the shipment is transferred en-bloc (as a whole) to a pre-designated CFS. The importer then has to follow the CFS model, under which cargo delivery takes roughly seven to nine days.
These flow charts show the stages in both models and how DPD eliminates three stages in the CFS model:
Under the DPD model, there are two modes of delivery:
Only importers who fulfil these government-prescribed guidelines can avail of this facility:
Additionally, DPD is open to shipments only if they fulfil these conditions:
Step 1: Submit a request letter – in the form of an application called Annexure-A (see copy below) – to the deputy commissioner, port customs house. This application must be on the importer’s letterhead and accompanied by these documents:
Sample image, Credit: cbic.gov.in
Step 2: The customs house will respond either with a permission letter or a rejection.
Step 3: If you receive a permission letter, this and your documents will then be forwarded to the terminal.
Step 4: Your registration is complete once you receive a unique DPD code from the terminal.
Step 5: Using this DPD code, you will need to open a PDA with the terminal.
The DPD model has had its share of teething troubles, many of which have smoothened out while some persist:
Despite its shortcomings, Direct Port Delivery is gaining in popularity and has made improvements:
At a time when port congestion and high logistics costs continue to challenge importers and exporters, the DPD model holds out hope for more reforms in India’s international trade and shipping industry.
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