India’s biggest road transport tender gets Supreme Court’s green signal

Source – thehindubusinessline.com

The Supreme Court on Friday allowed Jawaharlal Nehru Port Trust (JNPT) to proceed with India’s biggest road transport tender yet to evacuate import containers from the four terminals of India’s busiest container port to five locations and their nodes.

The tender is part of a plan to speed up imports through the direct port delivery (DPD) programme to cut transaction cost and time.

The tender — a first of its kind in India — involves selecting as much as seven big road transporters who will deploy some 2665 tractor-trailers (TTs) — both owned and aggregated — manufactured after April 1, 2009, for evacuating 580,747 twenty-foot equivalent units (TEUs) landing at the port to locations in Gujarat, Ahmednagar, Nashik, Aurangabad, Nagpur, Indore and Hyderabad, Goa, Bangalore and local region near Mumbai over distances ranging from 40 km to 1,100 km.

The apex court did not stay the tender while hearing an appeal brought by Maharashtra Heavy Vehicle and Inter State Container Operators Association (MHVICOA) after losing the case in the Mumbai high court in August, a JNPT official said. Neither did the court say that the finalisation of the tender will be subject to the outcome of the petition, he added.

The government has directed JNPT to raise the proportion of DPD volumes to 40 per cent.

The Customs have identified and permitted 778 major importers to avail themselves of DPD. “As the volumes of DPD and number of clients increases, the terminals will face the challenge of yard efficiency and congestion on the port roads. The DPD also brings in the challenge of reliable delivery to multitudes of importers,” says JNPT.

Currently, the terminals are stacking containers CFS/ICD wise and containers are allocated to trucks on “best-pick” basis. The port caters to 36 lakh road containers in its yard.

When the DPD volumes rise, the port will need to create additional stacks equivalent to the number of DPD clients in order to continue on the “best-pick” mode. This is not possible due to the high number of DPD clients and limitation of the yard area, equipment and manpower capacity.

“Trade and market forces have failed in offering any new solution to provide efficient transport solution for DPD. To cater to 40 per cent DPD volumes, there was a need to work out an ‘Out of the Box’ solution,” JPNT said. The model was worked out considering the twin requirements of keeping the number of stacks to the minimum and to keep the number of shifting to the minimum. According to the transport solution proposed by JNPT, all DPD containers will be distributed route-wise into the identified routes. Port terminal operators will arrange DPD import boxes route-wise in separate stacking area. A transporter will be selected for each location through a bidding process in which he is required to quote a lump sum rate that includes all costs for transporting containers from the port yard to the premises of the importer as well as movement of empty containers to the empty container yard.

The selected transporter has to clear the import containers from the port within 48 hours and deliver them at the factory/premises of the importer/location as designated by the importer, failing which the container will be transferred to the CFS designated by JNPT.

JNPT will not enter into any direct commercial arrangement with the transporter. It will be mandatory for importers to hire the selected transporters for taking the DPD import delivery by entering into a commercial arrangement with them.

The successful transporter shall have the exclusive right to clear the DPD containers from the port for the corresponding route for which it is selected.

Importers will not be allowed to use their own fleet.

The transporters association contended that the plan was not within the purview or jurisdiction of JNPT. “JNPT cannot appoint only 5-7 transporters and compel importers to take the services only from them. It is not the concern of JNPT,” said P Paithankar, President of MHVICOA.