Direct Port Delivery (DPD)
CBIC has taken various steps which have had the impact of reducing the dwell time as well as bringing down the logistics cost of EXIM clearances. One of the flagship initiatives in this regard has been the Direct Port Delivery (DPD). DPD is an innovative scheme, introduced at JNCH and replicated at other CFS-based ports in India by CBIC in September 2019. This initiative has transformed the process of cargo clearance, by allowing the facilitated consignments to be given ‘out of charge’ directly from the terminal premises, thereby eliminating the requirement of containers being moved to CFSs for completing Customs formalities before grant of ‘out of charge’.
DPD has been a major factor in improving ease of doing business, trade facilitation and reduction in cargo release time, since it reduces unnecessary transport to and handling of containers at the CFS, thereby resulting in substantial savings in cost of clearance as well.
With effect from 07th July, 2021 all the advance Bills of Entry which are fully facilitated (do not require assessment &/or examination)
would be granted the facility of DPD. This facility is over and above the erstwhile system of entity based DPD extended to Authorised Economic Operator (AEO) clients. This is expected to broaden the eligibility leading to further reduction in dwell time.
Background:
Jawaharlal Nehru Custom House (JNCH) is the premier Custom House in the country handling more than 60% containerized cargo of the Nation. The containers after offloading at JN Port used to be shifted to Container Freight Stations (CFSs) for Customs clearance
before delivery to the Importers.
There are about 35 CFSs located in the radius of approx. 20 km of the Port. The time taken was 8-10 days on an average due to the need for moving the container from terminal to CFS for clearance. This has additional costs of transportation, ground rent and other charges at the CFSs. Most times, the choice of CFS was with the shipping line and not with the importer. With enhanced RMS (Risk Management System), physical checking of the cargo getting substantially reduced, need for moving the cargo to the CFS resulted in additional costs and avoidable delay.
Challenges/ Resistances faced:
(a) Apprehension of losing business by CFSs and labourers were resolved by sensitization about increase in business due to more traffic at Port on account of reduced Turn Around Time (TAT).
(b) Some part of their CFS were converted into warehouse and DPD area to hold the goods after Customs Clearance which proved profitable for CFSs.
(c) Writ Petitions were filed by CFS association and Shipping Lines in Bombay High Court but the Hon’ble Court upheld the Department’s stand taken in public interest.
(d) Initially, importers had to be pursued through outreach programmes to convince them about the benefits of the scheme.
Implementation:
DPD Scheme has been expanded to all the Ports and eligibility has been prescribed.
Advantages:
(a) Reduced transaction Cost
(b) Shorter dwell time
(c) Exports are made competitive
As per estimates, approximately ₹ 8,000/- to ₹ 10,000/- are being saved as transaction cost per container besides reduction of dwell time to around 1-2 days from earlier 8-10 days.
Impact and Conclusion:
As per latest estimates (till September 2023), the number of importers registered for DPD and the percentage utilisation in terms of TEUs at JNCH are as follows:
| Ports | No. of importers taken DPD registration with Port | DPD Utilisation as percentage (%) of total TEUs cleared in previous month |
| JNCH | 10,864 | 70.68% |
Other ports under Customs zones such as Kolkata, Ahmedabad, Trichy (Prev.), Thiruvananthapuram are also showing increasing utilisation of DPD.
As such DPD has been instrumental in being one of the prominent reforms in Customs clearances process in recent years and for significant improvements in the Trading Across Border component of the World Bank`s Ease of Doing Business.
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