A Compulsion that Needs a Course Correction

Introduced to facilitate quick movement of containers, CFSs should become more transparent, customer-focussed and a value added facility to serve the trade better.

- Sisir Pradhan

In the last few months some developments have taken place that has left CFS investors on a bit untrodden path. The Union Cabinet has already hinted that proposed amendments are being contemplated with regard to the age-old Multi Modal Transportation of Goods Act, 1993, to augment transparency in the EXIM logistics sectors and to discourage CFSs from inflating bills for importers, in particular.

So how and when it emerged Container trade is largely done on CY-CY (container yard-to-container yard) basis, which means the outward journey of a container starts with the delivery of a consignment to the shipping liner at a container yard in exporting country and the trade cycle ends with the delivery of cargo to the consignee at a container yard in import country.

Explaining the origin of CFSs, Capt. Vivek Singh Anand, President, MANSA said, “The ideal practice should be a container needs to be delivered to a liner’s account at the port so that it could be moved directly to the Customsbonded container yard inside the port, and similarly in the case of an import container the importers should have been able to receive the container at the port and move it to his factory. Since ports like JN Port don’t have such facility, it led to the establishment of off-dock CFSs which were located outside the port area, and at last count total number has gone up in excess of 31 CFSs.”

In 2010, the then Union Government had chalked out a plan to use land available with major ports to put to use for cargo related activity, but later it was shelved. The plan was again revived in 2014. While public sector ports are yet to develop on-dock container yards, the situation is no different at major private ports.