|Setting up of ICDs/CFSs||With the liberalization of Indian economy, last few years have seen considerable growth in import and export volumes. With the new modes of transportation and increase in international trade and containerisation, the ports were getting congested. Further, with widespread industrialization and economic growth, the imports for use in hinterland and exports originating from there have increased over time. It was difficult for importers or exporters based in the hinterland, to come to a gateway port for clearance of imported or export goods. With the development of multi-modal transport system with its stress on greater facilitation to importers/exporters, a need was felt to develop Inland Container Depots (ICDs) or Container Freight Stations (CFSs). These were to essentially function like a dry port. These ICDs/CFSs were to function as common user facilities offering all the services for Customs clearance like any other port.
An Inland Container Depot (ICD)/ Container Freight Station (CFS) may be defined as :-
To monitor the growth of ICDs/CFSs, a regulatory authority in the form of an Inter-Ministerial Committee (IMC) under the chairmanship of the Additional Secretary(Infrastructure), Ministry of Commerce, has been set up. It comprises representatives from the Department of Revenue, Ministry of Surface Transport, Ministry of Railways and the Ministry of Commerce. The Committee considers the proposals submitted by Public Sector as well as Private Sector entrepreneurs for setting up of new ICDs/CFSs at different centres in the country and monitors their progress. There were about 30 ICDs/CFS prior to constitution of the IMC. After its constitution in the year 1992, the IMC has approved about 135 ICDs/CFS and out of total 165 ICDs/CFSs, about 100 are reported to be already in operation and others are in pipe line.
|Distinction between ICD & CFS||Functionally there is no distinction between an ICD/CFS as both are transit facilities, which offer services for containerization of break bulk cargo and vice-versa. These could be served by rail and/ or road transport.
An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports. CFS, on the other hand, is an off dock facility located near the servicing ports which helps in decongesting the port by shifting cargo and Customs related activities outside the port area. CFSs are largely expected to deal with break-bulk cargo originating/terminating in the immediate hinterland of a port any may also deal with rail borne traffic to and from inland locations.
Keeping in view the requirements of Customs Act, and need to introduce clarity in nomenclature, all containers terminal facilities in the hinterland would be designated as " ICDs".
CFS is treated as an extension of a port/ICD/air-cargo complex.
|Functions of ICDs and CFSs||The primary functions of ICD/CFS may be summed up as under:
· Receipt and dispatch/delivery of cargo.
· Stuffing and stripping of containers.
· Transit operations by rail/road to and from serving ports.
· Customs clearance.
· Consolidation and desegregation of LCL cargo.
· Temporary storage of cargo and containers.
· Reworking of containers.
· Maintenance and repair of container units.
|Operations of ICDs and CFSs||Rail Siding (in case of a rail based terminal)
The place where container trains are received, dispatched and handled in a terminal. Similarly, the containers are loaded on and unloaded from rail wagons at the siding through overhead cranes and / or other lifting equipments.
<ICD OPERATION & ROLE>
|Benefits of ICDs and CFSs||The benefits as envisaged from an ICD/CFS are as follows :-
The main benefits from ICDs/CFSs
· Concentration points for long distance cargoes and its unitisation.
· Service as a transit facility.
· Customs clearance facility available near the centres of production and consumption
· Reduced level of demurrage and pilferage.
· No Customs required at gateway ports.
· Issuance of through bill of lading by shipping lines, hereby resuming full liability of shipments.
· Reduced overall level of empty container movement.
· Competitive transport cost.
· Reduced inventory cost.
· Increased trade flows.
|The traffic flows between Inland centres of production and ports need to be analysed with reference to||1. Commodities
2. Directional-split (Imports/Exports)
3. Proportions of less-than-container load (LCL) & full-container-load (FCL)
4. Forecast of future growth.
5. Modes of transport available.
6. Possible reduction in tonne per kilometre or
7. Box per kilometre costs.
|Existing Guidelines for approval of ICD/CFS||The proposal for setting up of ICDs/CFSs are examined by the IMC on the basis of following guidelines:
Feasibility report: A survey/feasibility study must precede the setting up of ICDs/CFSs and copy of the report should invariably accompany the application for setting up such a facility. The facility has to be economically viable for the management and attractive to users, to the railways for full train movements; and to other transport operators; shipping lines; freight forwarders, etc.
Land requirements: The minimum area requirement for a CFS would be One Hectare and for ICD Four Hectare. However, a proposal could also be considered having less area on consideration of technological upgradation and other peculiar features justifying such a deviation.
Design and Lay-out of ICD/CFS: The design and layout should be the most modern state-of-art equipped with mechanical/electrical facilities of international standards. Key to a good lay-out is the smooth flow of containers, cargo and vehicles through the ICD/CFS. The design and lay out should take into account initial volume of business, estimated volume in 10 years’ horizon and the type of facilities exporters would require. The initial lay out should be capable of adaptation to changing circumstances. The design broadly should encompass features like (rail) siding, container yard, gate house and security features, boundary wall (fencing), roads, pavements, office building and public amenities. The track length and number of tracks should be adequate to handle rakes and for stabling trains where relevant.
The perimeter fencing and lighting must meet the standards required by Customs authorities. The gate being the focal point of site security should be properly planned.
The administration building is the focal point of production and processing of all documentation relating to handling of cargo and containers and its size will be determined by the needs of potential occupants. Fixed provisions should be made for sanitation facilities and possibly a food service facility.
A good communication system and computerisation and EDI connectivity is essential. Following Infrastructure should be available at the ICDs/CFSs
Provision of standard pavement for heavy duty equipment for use in the operational and stacking area of the terminal. In cases where only chassis operation is to be performed, the pavement standard could be limited to that of a highway.
· Office building for ICD, Customs office and a separate block for user agencies equipped with basic facilities.
· Warehousing facility, separately for exports and imports and long term storage of bonded cargo.
· Gate Complex with separate entry and exit.
· Adequate parking space for vehicles awaiting entry to the terminal.
· Boundary wall according to standards specified by Customs.
· Internal roads for service and circulating areas.
· Electronic weighbridge.
· Computerised processing of documents with capability of being linked to EDI.
Equipping the ICD/CFS: The ICD/CFS would select most modern handling equipment for loading, unloading of containers from rail flats, chassis, their stacking, movement, cargo handling, stuffing/destuffing, etc. Following minimum equipment should be made available at ICDs/CFSs (Reach stacker may not be mandatory:
Dedicated equipment such as lift truck (front end loader, side loader or reach-stacker), straddle carrier, rail mounted yard gantry crane, rubber tyred yard gantry crane, etc. of reputed make and in good working condition (not more than 5 to 8 years old) and equipped with a telescopic spreader for handling the 20 ft and 40 ft boxes. The equipment must have a minimum residual life of 8 years duly certified by the manufacturer or a recognized inspection agency. An additional unit of equipment should be provided when the throughput exceeds 8000 TEUs per annum or its multiples for lift truck based operations.
Terminals resorting to purely chassis-based operations do not require dedicated box handling equipment. However, chassis-based operations should be restricted to CFSs proposed to be set up near ports.
Small capacity (2 to 5 tonnes) forklifts must be provided for cargo handling operations in all terminals.
Rail head ICDs: The parties desirous of setting up a rail based ICD, have to provide at their own cost all infrastructure facilities including land, track, handling equipment for containers, maintenance of assets including track, rolling stock, etc. as per extant railway rules applicable to private sidings.
Tariff :Tariff structure and costing is to be worked out as a part of the feasibility study .
General: The main function of an ICD/CFS being receipt, despatch and clearance of containerised cargo, the need for an up-to-date inventory control and tracking system to locate containers/cargo is paramount. Each functional unit of the facility (e.g. siding, container yard, gate, stuffing, de-stuffing area etc.) should have uptodate, and where possible online information about all the containers etc., to meet the requirements of customers, administration, railways etc.
|Procedure for approval of ICD||Proposals for setting up ICD/CFS will be considered and cleared, on merits, by an Inter Ministerial Committee for ICDs/CFSs, which consists of officials of the Ministries of Commerce, Finance (Department of Revenue), Railways and Shipping. Views of the State Governments as necessary would be obtained.
Application 10 copies in enclosed form should be submitted to the Infrastructure Division in the Ministry of Commerce, Udyog Bhavan, New Delhi. Application must be accompanied by 10 copies of feasibility reports mentioned in the guidelines.
The applicant should also send a separate copy of the application to the jurisdictional Commissioner of Customs. The Commissioner of Customs will send his comments to the Ministry of Commerce and the Central Board of Excise & Customs (CBEC) within 30 days. In case, the project is planned in a port town, a copy of the proposal should also be sent to the concerned Port Authority who would furnish their comments within 30 days to the Ministry of Surface Transport and the Ministry of Commerce.
The applicants are also requested to familiarise with the statutory Custom requirements in relation to Bonding, Transit Bond, Security Insurance and other necessary procedural requirements and cost recovery charges payable before filing the application.
On receipt of the proposal, the Ministry of Commerce would take action to obtain the comments from the jurisdictional Commissioner of Customs and other concerned agencies within 30 days. Wherever necessary, a copy of the proposal should also be sent to Zonal Railway Manager, under intimation to the Ministry of Railways One copy of the proposal would also be made available to the IMC Members for advance action. The decision of the IMC would be taken within six weeks of the receipt of the proposal under normal circumstances.
On acceptance of a proposal, a Letter of Intent will be issued to the applicant, which will enable it to initiate steps to create infrastructure.
The applicant would be required to set up the infrastructure within one year from the date of approval. The Ministry of Commerce may grant an extension of six months keeping in view the justification given by the party. Thereafter, a report would be submitted to IMC to consider extension for a further (final) period of six months. The IMC may consider extension or may submitted to IMC to withdraw the approval granted.
The applicant, after receipt of approval, shall send quarterly progress report to Ministry of Commerce. Three formats (given as annexure I to III) for sending the quarterly/ annual report shall have to be submitted to Department of Commerce through electronic mode as well as through hard copy.
After the applicant has put up the required infrastructure, met the security standards of the jurisdictional Commissioner of Customs and provided a bond backed by bank guarantee to the Customs, final clearance and Customs notification will be issued.
The approval will be subject to cancellation in the event of any abuse or violation of the conditions of approval.
The working of the ICD/CFS will be open to review by the Inter Ministerial Committee.
Once required infrastructure for an ICD/CFS is developed, a notification under section 8 of the Customs Act declaring the facility as a custom area is issued by the jurisdictional Commissioner of Customs. The operators of the ICDs/CFSs are appointed custodians under section 45 of the Customs Act, 1962, provided they satisfy the conditions relating to development of infrastructure & facilities and furnish bonds and securities as laid down for such purpose in the CBEC Circular No.128/95-Cus., dated 14.12.95. Custodians are responsible for safety and security of the goods stored in their ICD/CFS.
|Inter-Ministerial Group||An Inter Ministerial Group (IMG) under the chairmanship of Revenue Secretary with other members from Planning Commission, Shipping, Commerce Ministries and Central Board of Excise and Customs was constituted in pursuance to a decision taken in a meeting of the Committee on Infrastructure on the Ports Sector. The Group obtained feedback from the trade and other stakeholders and deliberated in detail on streamlining customs procedures in the functioning of Container Freight Stations (CFS) and ports in the background of existing international standards.|
|Posting of Customs officers on cost recovery basis||For the purpose of Customs clearance at the ICDs/CFSs, Customs staff is provided at the ICD/CFS on cost recovery basis. The sanction for posting of officers is issued by the Administrative Wing of the Central Board of Excise & Customs.
The custodians are required to pay @ 185% of total salary of officers actually posted at the ICD/CFS. Normally, 13 officers (1 Assistant/Deputy Commissioner, 2 Appraisers, 2 Inspectors, 2 UDCs, 2 LDCs, 4 Sepoys) are posted at an ICD/CFS having both import and export.
The ICD/CFS having only export is given 7 officers (1 Assistant/Deputy Commissioner, 1 Appraiser, 1 Inspector, 1 UDC, 1 LDC, 2 Sepoys).
In the initial stages of operations of an ICD/CFS, due to less volume of trade, full strength of the officers may not be required. In such a situation, if the custodian requests, the Commissioner of Customs may, after due consideration post the officers in less than the sanctioned strength in the said ICD/CFS. Gradually, when the business picks up at the ICD, the full contingent of staff may be posted. The Commissioner of Customs also would accept the deposit of advance cost recovery charges for three months for the number of staff which will be actually posted in an ICD/CFS.
|Custom Ref||(Reference instructions issued vide letter F.No.434/12/92-Cus.IV, dated 5.6.92,
Circulars No.128/95-Cus., dated 14.12.95, 133/95-Cus., dated 22.12.95, 52/97-Cus., dated 17.10.97 and 80/98-Cus., dated 26.10.98)
|Procedure of clearance of goods at Ports||The Shipping lines/steamer Agents/carriers/ Consol Operators file the
Import General Manifest (IGM) in accordance with Section 30 of the Customs Act, 1962.
After filing the IGM and on arrival of the goods, Custom House Agent/Importer files Bill of Entry (cargo declaration) in terms of Section 46 of Customs Act, 1962. The first stage for processing a Bill of Entry is noting/registration of Bill of Entry (B/E). The B/E is then forwarded to the concerned Appraising group in the Custom House dealing with the commodity sought to be cleared. The assessing officer in the appraising group assesses the duty liability, taking due note of any exemption or benefits claimed by the importer. Necessary checks regarding any restriction or prohibition on the goods imported are followed. In case of doubt, the officer may give an examination order in advance of finalization of assessment Otherwise, the B/E is finally assessed and the importer deposits the duty calculated with the nominated banks.
After assessment the B/E is passed on to the Shed ppraiser/Superintendent for examination of goods along with the B/E. The Shed Inspector/examiners examine the goods and enter their report on the B/E with signature of the importer/CHA in token of examination in his presence. After completing the examination of the goods, the shed Appraiser/Superintendent would give order for “Out of Charge”. However, in rare cases, if some discrepancy is found between the
declaration and the result of examination of cargo, the Assistant Commissioner/Deputy
Commissioner (AC/DC) revises the assessment on the basis of examination report. After issuance of Out of Charge order on the B/E, the importer presents the same to the Custodian who in turn issues the Gate Pass after verification of correctness of Bill of Lading and number of packages. The importer/CHA presents importer’s copy of the B/E and the Custodian Gate Pass to the Customs Officer at the gate while taking the goods out of the Customs area.
As regards exports, Shipping Bills are required to be filed along with other documents such as invoice, Application for Removal (ARE), packing list etc. The Assessing Officer in the export department checks the value of the goods, classification, rate of duty and others with regards to different provisions and the Foreign Trade Policy and related documents.
After the Shipping Bill is passed by export department, the exporter presents the goods to the Shed Appraiser (Export) for examination. The examination is carried out under supervision of Shed Appraiser/ Superintendent (Export) and after examination, officer gives a “Let Export” order, after which exporter may load the goods into vessel/aircraft under supervision of Customs Officer.
|Dwell Time Process Exports||1. IGM to Entry Inward – 0 Days – 0%
2. Entry Inwards to OOC (Out of Charge) – 15.9 days 100%
3. Entry Inwards to submission of Bill of Entry by Importer – 7.81 days 49.11%
4. Submission to Assessment – 1.58 days 9.93%
5. Assessment to Payment of Duty – 3.49 days 21.94%
6. Payment of Duty to Goods registration – 2.80 days 17.61%
7. Goods Registration to OOC – 0.22 days 1.38%
|Dwell Time Process Imports||1. IGM to Entry inwards – 0%
2. Entry inwards to OOC – 15.43days -100%
3. Entry inwards to Filing of B/E – 8.2days – 53.14%
4. Filing of B/E to Assessment – 1.56days – 10.11%
5. Assessment to payment of duty – 3.3days -21.38%
6. Payment of duty to goods registration – 2.23days- 14.45%
7. Goods registration to out of charge – 0.14days- 0.90%
|Issues Raised for Custom Clearance||· Inter Port IGM Transfer
· EDI Filing to be extended during the holidays
· Simplified procedure of SMTP
· Custom Guarantee/ Bond for six months
· Conversion of vessel
· Auction of Goods
|Major ICD||· Tuglakabad
|<HANDBOOK ON MANAGEMENT & OPERATION OF DRY PORTS>|
|Tariff Comparison||<ICD MODEL FOR RATES>
<TARIFF FILING FORMS AT PRIVATE TERMINALS>
|Operational Measures||· Reach Stacker/Crane:- Moves/Crane Hours; TEU/Crane Hours
· Teus/Train Inward and Otutward : Total Teus/Trains (Inward+Outward)
· Inward Teus/Inward Trains
· Outward Teus/Outward Trains
· Container Dwell Time
· Average Handling Charges Revenue/Loaded Teus in comparison with Rate/ Loaded Teu
|Inco Terms||Bill of Entry
Bill of Lading
Break Bulk Cargo
CCA – Common Custom Area
CFR – Cost of Freight to…….. Name of Destination
CFS – Container Freight Station
CIF – Cost Insurance Freight
CIP – Carriage Insurance Paid to…….. Name of Destination
COFC – Container on Flat Car (Flat Railway Wagon)
CTD – Combined Transport Document
CTO – Container Transport Operatory
CY – Container Yard
DT – Dwell Time
EDI – Electronic Data Interface
ER – Equpment Receipt
FCL – Full Container Load
FOB – Free on Board
ICD – Inland Container Depot
ISO – International Orgainisation for Standards
JIT – Just in Time
LCL – Less Container Load
MTD – Multimodal Transport Document
MTO – Multimodal Transport Orgianisation
O-D – Origin – Destination
D-D – Door to Door
T-D – Terminal to Door
D-T – Door to Terminal
T-T – Terminal to Terminal