Container Freight Stations: Role and Issues – Interpretations at Indian Ports

Samit Samit Chakraborty
Manager (Projects)

As India embarks on a renewed journey towards the overall improvement of its trade environment, port-led development would continue to be the fulcrum around which much of the strategic deliberations are expected to revolve. Further, cargo handling capacity of ports – a key factor determining trade volumes – would be determined to a considerable extent by the logistics supply chain they operate in. Container Freight Stations (CFS) currently form a major infrastructural component in this framework, primarily contributing towards the decongestion of ports and enhancement of handling capacity at the terminals.
A CFS, as defined in the Customs Manual (2015) by CBEC, is “A common user facility with public authority status equipped with fixed installations and offering services for handling and temporary storage of import/export laden and empty containers carried under Customs transit by any applicable mode of transport placed under Customs control. All the activities related to clearance of goods for home use, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export, transshipment, take place from such stations.”
Over the years, factors such as considerable increase in trade volumes and persistent shift towards containerization of cargo have made way for increased role of container freight stations in India. Being an extension of the Customs departments at the ports, important procedures such as stuffing/de-stuffing of cargo, aggregation/segregation of cargo and examination/clearance related activities are carried out at the container freight stations, which make them an integral part of the existing EXIM value chain. However, BRIEF’s consistent engagements at various ports in the country – including critical analysis of viewpoints of key stakeholders – have also revolved around the functional impediments faced at CFSs across the country.
The foremost concern frequently heard of is the ambiguity surrounding the selection of CFSs at ports such as the Jawaharlal Nehru Port. There have been grievances from importers and Customs House Agents (CHAs) highlighting instances wherein cargo is moved to CFSs as per the choice of the shipping lines, including cases wherein they have to be moved to CFSs empaneled with the shipping lines, in spite of there being a Customs Public Notice entitling the importers to move their cargo to CFSs of their choice. On the other hand, according to the Customs Public Notice, the CHAs are required to file the Bill of Entry with relevant details including details of containers as well as choice of CFS prior to the filing of the Import General Manifest (IGM) by the shipping lines, delays in which are also frequently reported. As per stakeholders, less than one per cent of the importers are doing it currently. In such a scenario, the importance of streamlined processes including the submission of Bill of Entry – with the CFS Code mentioned – by the importer/CHA before IGM is filed by the shipping line and seamless movement of goods to the specified CFS becomes imperative.
As far as operational aspects are concerned, delayed movement of containers from the port to the CFS continue to be a perennial problem at quite a few ports. Containers are allowed to stay on the wharf for a period of three days, post which demurrage has to be incurred on a daily basis, which boils down to considerable cost pressure for the importers. The delays in movement can be attributed to a multitude of factors, including congestion at the ports, dearth of modern container handling equipment, lack of adequate transport and insufficient number of boarding officials among others. Instances of delays at the CFS are also reported regularly by traders, owing to lack of customs officials, inadequacies in terms of facilities for examination of goods, etc. Redressal of such issues is regarded as highly essential by stakeholders. The presence of increased number of CFSs operating 24/7 is also an area that warrants considerable attention as per the traders. For instance, out of the 14 CFSs at the V.O. Chidambaranar Port, only one i.e. the CONCOR CFS ensures 24/7 operations. An increase in this number can potentially see a considerable decline in clearance related delays.
Other aspects such as standardization of rates, services and infrastructure at container freight stations coupled with enhancements in allied infrastructural facilities such as signage, buffer yards and parking lots, advancements in traffic management at ports for improved operations, etc. are also seen by traders as necessary developments that can be highly instrumental in easing operations and making trade more competitive.
To sum up, the surge in India’s EXIM trade is expected to continue, entailing persistent augmentation in container traffic in the years to come. Container freight stations form an important part of the EXIM supply chain, and their role in managing and sustaining such growth will be crucial. Enhanced infrastructural facilities, seamless and uninterrupted operations, standardised charges and transparency on crucial aspects such as selection of CFSs can potentially go a long way in improving operations at container freight stations as well as strengthening the logistics supply chain as a whole.