Round Table on "Port Congestion at JNPT and the Continuous Breakdown of Customs EDI Systems” held on Wednesday, January 20, 2016 at 3.30 p.m. in IMC.
Keeping in mind a wide and complex gamut of issues stemming from a deteriorating experience at JNPT which is having its repercussions on the entire logistics sector, the Shipping and Ports Committee of the Indian Merchants’ Chamber organized an interactive meeting of key policymakers and industry leaders. The list of participants is given in the Annexure.
The key issues / areas of concern noted:
A number of short-term problems were discussed, with the decision that all present would join together to take action to address them.
Long term issues to be addressed included the following:
Need for out-of-the-box thinking, innovation, business process reengineering;
Existing legislation: need for simplification, codification and rationalization;
Rationalization and simplification of documentation, processes and practices;
EDI across all stakeholder segments (including a PCS, Customs & Port EDI interface, E-Billing, EDO, Gateway automation, Vehicle Booking System, etc);
24x7 operations
Adequate infrastructure within the port, terminals and CFSs (including the development of a new bridge and roads, particularly service roads for construction vehicles);
Establishment of an umbrella body to govern and regulate industry performance and accountability;
Imposition on / invocation of ESMA at Ports to achieve discipline and productivity in the national interest;
Supporting and strengthening the Traffic Police force;
Providing for the critical working levels of staff, including truck drivers, who are literally the prime movers of our business;
Change in mindset of all players and regulators, so as to achieve mutual cooperation and understanding, sharing of responsibility, working to benchmarked standards, removing all impediments to progress including vested interests, and achieving the common objectives of Make in India, Ease of Doing Business in/with India, and placing our country high on the global trade map.
The IMC has committed itself to providing a neutral and enabling platform for this industry initiative.
The discussions in detail:
In his keynote presentation, Mr. Deepak Shetty, Director General Shipping, made the following observations:
Given the gravity of the situation, there is a need to resort to out-of-the-box thinking which will encompass complete automation and business process reengineering.
The important focus areas are:
Rationalisation & simplification of documentation
EDI across all stakeholders
There is a divide between different agencies. Vested interests are trying to protect their own turfs and that will ensure that some of the currently nagging issues will persist for around five years more.
The process of sensitization had to be carried on and the message must go out that one can play with the system only this far and no further.
There is a need to simplify processes and bureaucracy, some of which is already happening. For example, from April 1, 2017, the office of DG Shipping will go fully online.
The merchant shipping rules need to be revisited. The new Merchant Shipping Bill will focus on simplification, codification and rationalization. S.410 of the Merchant Shipping Act will be deleted.
The Merchant Shipping Rules also need to be revamped. In this context, he mentioned that 20% of the rules in the book had been cut at one stroke within the past one year.
He acknowledged a suggestion that ESMA should be brought into play for the smooth working of the Port in the national interest, with JNPT taking initiative.
The following observations were made by some of the other eminent participants:
Mr. Neeraj Bansal, Dy. Chairman, JNPT:
No doubt the situation is grim and every stakeholder must take serious action. There is no use engaging in a blame game. However, it must be said to the credit of the port that despite all the constraints they face, a record volume of containers was handled by JNPT in 2015.
The major congestion is occurring outside the port area. A number of issues exist therein which need to be addressed by other agencies of the Government. Unfortunately, coordination between them is not always up to the mark.
Container handling is working well, with the usual container trucks being managed. It is the construction trucks’ traffic that is causing bottlenecks, which the port is trying to address. Additional access roads and a new bridge are being constructed at a cost of Rs. 3000 crores to ease the situation. All low hanging fruits have been plucked.
4th Container Terminal – 7-800 trucks in 3 months a separate road will start. Wherever possible, roads have been widened and concretized.
The Port is promoting movement to CFSs by rail. Parking areas have been made operational and they now need to be streamlined.
The JNPCT terminal is operating well; the other two terminals are facing some difficulty (the NSICT is on partial strike).
Access to/from Port is a problem – there is a village in between.
Parking of vehicles – GTI & NSICT have been given space. This needs to be streamlined.
MoS has benchmarked operational parameters, which should be pursued.
The Dwell Time of the JNPT Terminal is 1.23 days for a container (import) – it then takes the shipment 9.50 days to get out of the CFSs. Hence focus should be on the areas where improvements are needed.
There is uncertainty about the expected clearance time for shipments.
GTI also closes their gates at certain times.
Import / export documents to accompany trucks.
For the large volume of container movements (Rs. 45,000 crores of through-put in value), Customs have only 2 scanners and 1 mobile scanner. More scanners and software solutions are urgently needed. The Ministry of Shipping has decided to intervene; hence the Port will buy and install scanners for use by the Customs.
At present, Customs are still collecting a hard copy of Form E-13, which practice can be done away with.
Automation is being aggressively pursued: shipping lines are being urged to introduce the EDO (Electronic Delivery Order); e-berthing has been introduced, and automatic, seamless transacting with the trade has started.
The malfunctioning of the Customs EDI system is contributing to the congestion at JNPT and this is an area outside JNPT’s jurisdiction. Customs may take another 6 months to revamp their systems.
Tariffs of all stake holders have been put on the JNPT website to enable transparency and easier transaction cost assessment for the port user.
More transparency and accountability is needed, with new energy and engineering.
Violence and strikes rule JNPT and a way out of the impasse has to be found. There are no short term solutions here which could be both viable and sustainable.
The JNPT Police have been supported with 50 guards being provided by the Port to the traffic police. However, other stakeholders also have to chip in and they don’t always do so.
It is unfortunate that most people are ignorant as to the good work done by the port authorities. As far as throughput is concerned, a reasonably good job is being done by JNPT.
The key issue is an attitudinal change. JNPT is not getting concrete suggestions from stakeholders. A lot of effort is needed to strengthen the current system and the concerned people are not coming forth with their inputs.
Mr. Arvind Salve:
The provision for a separate road for the dumper has been made to the GTI. However, this should be built before work commences on the terminal. Unfortunately, this is not going to happen. The congestion will get out of hand once the road work commences.
The internal working of the terminals needs to be sorted out at the earliest. The police are working under many constraints, particularly a lack of adequate manpower. This manifests itself in a difficult situation wherein all have to chip in to salvage it.
The coming two and half years will be a testing time in resolving issues pertaining to port congestion and delays in cargo clearance. It is actually the delays in cargo clearance which leads to traffic snarls on the road. If all stakeholders will not accept responsibility and chip in, the problem will only worsen.
There are many issues pertaining to road traffic at the terminals which most stakeholders just don’t want to be aware of. This attitude is unproductive; all stakeholders need to understand ground realities.
The current situation will only worsen when the service road work starts. How the work on the bridge will start is a problem; no alternate roads have been planned till now.
Internal working at GTI and NSICT Terminals needs improvement. Stakeholders need to accept their responsibilities and act on them.
The trade must focus on the needs of the drivers of the vehicles – they are the prime movers of the cargo. They should be enabled and empowered with instructions, processes and paperwork, and facilitated in their personal conveniences.
The severe constraints the traffic police are working under are not appreciated. While criticism against them is quick, their good work is often overlooked.
Mr. Anil Singh, Senior VP and MD, DP World; NSICT:
There is an atmosphere of fear generated in the port area and working under such conditions is stressful and affects productivity adversely. This scenario creates issues down the line.
Even though the problem is assuming severe proportions, it is not insurmountable and simply calls for a sustained will on the part of the authorities.
Digitization is the way forward and all stakeholders must sit at the table to discuss it.
A Port Community System (PCS) which will integrate the electronic flow of port-related documents/information and functioning as a centralized hub for the ports can be put in place in six months. That will go a long way in alleviating the situation.
A new system of incentives and disincentives needs to be put in place at the earliest to galvanize the players.
With regard to the movement of logistics within the country, India is one of the most cost-ineffective countries in the world. This issue needs to be addressed urgently.
Mr. Ajay Singh:
DP World has implemented a Gate Automation System which will ensure that truckers using the International Container Terminal at JNPT will see faster turnarounds, thus easing the bottleneck in the system considerably.
Gate automation will also help to reduce malpractices by removing manual processes at the terminal gates and ensuring a seamless movement of cargo.
Despite all this, there are still some key logistical issues at the terminals which can be resolved only by the authorities. All stakeholders need to sit together to find innovative ways of resolving them.
It was suggested that a Vehicle Booking System, by which the truck driver would be intimated in advance of the date, time and gate at which to enter the shipment, would greatly remove the present information gaps and lead to smooth entry into the terminals.
Capt Sunil Chopra, EC Member, CSLA:
Common grievances faced at the terminals are a lack of parking discipline, a poor state of patrolling and issues pertaining to law and orderliness. All of them lead to traffic jams and slowdowns.
These issues have a direct impact on the viability of the trade, and need to be resolved at the soonest.
India’s exports get affected not only by global economic uncertainties but also by such chaos at the terminals. This tends to have a demoralizing effect on the Exim community.
There is a need to have an innovative and integrated approach to resolve these issues in which both the Central and the State Governments have a well-defined role to play.
Mr. Umesh Grover, Secy General, CFSAI:
All CFS containers always have documentation, hence cannot be blamed for any delays at all. Only outside containers (factory stuffed, etc) have documentation issues.
Mr. Ashish Pednekar, President, BCHAA:
The road leading from Navi Mumbai to JNPT also has very poor infrastructure with even basic facilities missing. This must be tackled on a priority basis.
The attention required to be given to the port sector by the Govt of Maharashtra is missing. The State Government should adopt a more proactive approach.
Government agencies have a tendency to share data only with other Government agencies. This mindset needs to change.
A lack of discipline and a lack of involvement of all stakeholders is the root of the problem. In this context, the Essential Services Maintenance Act (ESMA) should be invoked for this sector; otherwise nothing will be enforceable, and the situation will only deteriorate.
Mr. Samir Shah, Chairman, FFFAI:
Each stakeholder should create a matrix of its expectations of each other segment, thereby tabling the total set of needs and expectations. This approach would facilitate an integrated approach towards problem-solving by the entire trade jointly, balancing mutual needs and capabilities.
Mr. Shashi Tanna, Co-Chair, IMC SPC:
The present situation in JNPT is threatening to turn violent. Urgent action is required to address this complex situation.
NSICT has a partial strike. Such news adversely affects the trade and economy, as also the image of the nation.
The Customs’ EDI system does not seem to help much as it breaks down more often than it works. The basic problem is not with the software but with the hardware which is antiquated and needs to be replaced.
The bureaucracy is stifling and it compounds the underlying problems. We need to emerge from this documentation/paper raj mentality.
Due to the congestion at JNPT, there are 14 km long lines of trucks waiting in queues, stationary on local bridges in the surrounding areas which are not designed to bear static loads. This situation poses a grave risk to the local physical infrastructure and human life.
Mr. Vivek Kele, President, AMTOI:
Process reengineering and getting all stakeholders onto a single platform is needed. AMTOI is currently at an advanced stage of this process and is also lobbying all the concerned ministries regarding the same.
There is both a long and a short term solution, which will need sustained commitment from all stakeholders. Another meeting of the same group should take place soon, which will delineate all the incremental steps taken regarding the resolution of these issues.
Other remarks made by participants touched upon the dire need to improve and reengineer our processes, attitudes, mutual cooperation and performance in the national interest:
We need to improve the image we are presenting to our global consumers – they must be convinced that our industry in India is serious about change. Rather than taking quantum steps to improve the system, positive incremental changes will be quicker to tackle and implement.
We need to accept the fact that there is a problem in our system. Global trade will not pause to accommodate our inefficiencies. The potential loss to the system by way of port congestion and unnecessary delays is huge and rising by the day. The pain of the export-import players in India needs to be understood.
There is a huge shift in the port traffic from Mumbai to Gujarat. The JNPT authorities must take speedy action and come up with workable solutions if this trend is to be checked and reversed.
We need to focus on doing small things to smoothen the life of the trucker. The need of the hour is to transcend the regressive bureaucratic mindset which is hampering efficiency. In this regards, taking baby steps will resolve many issues.
Indian shipping lines need to evolve themselves into something bigger and better in a time-bound frame otherwise foreign carriers will decide to skip our ports, in which case the biggest loser will be the nation.
Whether it is through instilling discipline or fear, the need of the hour is to change our attitudes. We must balance our expectations of the authorities with what we individually can also contribute, to achieve and ensure the efficiency of our ports and the concomitant smooth functioning of the Exim trade.
In this regard, an umbrella body could be established to make stakeholders accountable to the system. On the other hand, all stakeholders could best achieve results through mutual cooperation if they were to observe self-discipline and become accountable to each other through such a neutral and enabling platform as the IMC has provided.
We must set deadlines, and work to a plan. There must be active and timely follow through action to ensure positive results.
Moderating the Round Table, Mr. Snehal Parikh, Chairman, Shipping and Ports Committee, IMC, said that fundamental traits like discipline and mutual cooperation and the effective handling of actions and reactions are within our own hands. We need to benchmark ourselves to become accountable as a group, and fulfill our role of service providers.
Delivering the welcome address, IMC President Mr. Dilip Piramal said that congestion free ports are a prerequisite to the efficient functioning of the economy. Given its forward and backward linkages, congestion at the ports affects the efficiency of all modes of transportation and proves to be a drag on the economy. The ease of doing business in any nation is reflected in the efficiency of its infrastructure, and ports have a vital role to play in this regard.
Mr. Snehal Parikh thanked all participants profusely for this interesting and insightful discussion, and proposed that another meeting with the same group would be held within two months’ time to take stock of progress and ensure adequate and timely follow-up action at the highest levels. All present confirmed their interest and commitment to this end.
Dr. Dhananjay Samant
Director and Chief Economist
Annexure Attendance at the IMC SPC Round Table 1 on 20th January 2016
