With ease of doing business for customers becoming the new mantra for India’s state-owned ports, it’s not surprising to see container terminal operators, even if they are run by private firms at these ports, coming up with new initiatives to score brownie points.
Gateway Terminals India Pvt. Ltd, 74% owned by APM Terminals Management BV, the container terminal operating unit of Danish shipping and oil giant AP Moller Maersk Group A/S, has introduced what it calls continuous gate-in facility for exporters, a first in India.
Gateway Terminals is the biggest of the four container terminals operating at Jawaharlal Nehru (JN) Port, India’s busiest container gateway.
To put it simply, the new initiative means exporters can deliver containers at the terminal for the next shipping cycle, even when there is an existing vessel docked at the terminal for the current cycle. Other terminals close their gate-in services for the next shipping cycle for about 24-36 hours when a ship is docked till the loading and unloading process is complete for that vessel.
Shipping cycles are weekly. Terminals allow container cargo for the current shipping cycle to be delivered till a particular cut-off time. Once the unloading and loading process is completed for a docked ship and only upon the vessel sailing is the gate-in facility opened for the next vessel/shipping cycle. Considering 80% of the cargo delivered still comes by road (70% of which are up-country cargo containers from the northern hinterland), this facility of continuous gate-in obviates the necessity for trucks having to park outside the terminal on the approach road, awaiting the opening of the gates for the next vessel, thus preventing congestion and reducing costs for the trade.
The continuous gate-in service, according to Gateway Terminals, negates indirect costs and reduces congestion due to container-laden trucks clogging the approach roads to the port for gate opening, a common sight at JN Port for long.
It takes about 378 hours and $695 for importing a cargo container through Jawaharlal Nehru Port, according to the Doing Business Report 2016 published by the World Bank.
The time and cost involved in an import shipment are 115 hours and $214 on account of customs, 196 hours and $342 on port and border handling and 67 hours and $139 on document preparation.
Port and border handling on the import side includes the time spent by the cargo container at container freight stations (CFS) located outside the port area which takes nearly 8-9 days at JN Port. On the import side, the average time taken in the port per se is around 36 hours at JN Port, according to the port authority.
Similarly, on the cost for port and border handling which is indicated as $342, the cost for handling within JN Port is only around $60, while the remaining cost is related to CFS and other logistics activities.
Exporting a cargo container through JN Port entails 149 hours and $472, according to the World Bank report. This includes 37 hours and $170 at customs, 51 hours and $198 on port and border handling and 61 hours and $104 on documentation.
One of the major issues on the exports side at JN Port is the waiting time for trucks before entry into individual terminals.
The reasons attributed for the long wait are that many trucks which carry factory-stuffed containers come well in advance so as not to miss the ship, and add to congestion on the roads.
Factory-stuffed containers are mostly routed through CFS but some tractor trailers carrying containers do not go into the CFS and, instead, wait on the roads. At times, terminals even shut down their gates unannounced when a ship is at berth unloading and loading. These unannounced shutdowns lead to congestion at the gates and on the roads.
The main reason for bringing containers well in advance to the port area is the anxiety of the exporter to ensure the container does not miss the deadline for entry into the terminal before the ship departs. There is no reliable information for planning container movement.
The government has advised JN Port authorities to compress the gate window time from the current five days to four days immediately and to three days over a period of time.
The continuous gate-in initiative introduced by Gateway Terminals, though laudable, raises some questions. Does this mean Gateway Terminals will not follow a cut-off time for exporters to deliver their containers at its terminal?
If so, wouldn’t it render the window concept—a term used to describe the time slot given to a ship for docking at a terminal—meaningless.
Some two decades ago, trucks carrying containers used to come in any point of time, drop the containers and go off; vessels used to come at any point of time, unload, load and sail off. This led to chaos and resulted in the introduction of the window concept globally.
If there is no cut-off time at Gateway Terminals, can an exporter gate-in a container for loading on a ship that is expected, say, in three weeks? Who will pay the storage charges till the container is loaded onto the ship?
Gateway Terminals says it is not collecting any extra charges for offering the continuous gate-in facility to customers. On the contrary, it says, customers are saving trucking costs—instead of waiting outside on the road, the containers are taken inside.
But, there will be a cost involved in this exercise because the rate regulator for ports such as JN Port allows a free storage time of three days. After that, charges are levied depending on the duration of the stay.
These days, there is enough parking space inside the terminal yard due to low volumes. And, empty containers lying in the yard are being taken out quickly because the ground rent for empties is significantly higher than laden ones.
So, essentially, the continuous gate-in facility may end up transferring cost from one place (roads) to another place (terminals) unless the terminal operator decides to waive of the storage charges.
But then, who would pass up an opportunity to make an extra buck in these difficult times? An exporter will now have to choose whether he prefers his container to stay on the road with the attendant costs or take the container inside the terminal, again with attendant costs. It’s a trade-off.
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