Asian Institute of Transport Development

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UN-ESCAP Committee on Managing Globalization (Thir
d Session) 12-14 September 2006,
Bangkok Promoting Dry Ports as a Means of
Sharing the Benefits of Globalization with
Inland Locations
Presentation by Raghu Dayal former Founding
Managing Director of Container Corporation of
India (CONCOR) Asian Institute of Transport
Development
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Regions Tryst with Destiny

• Regions Resurgence
• A global economic powerhouse
• GDP US 9.4 trillion
• 60 of world population
• 30 of world exports
• 12 of worlds 20 mega cities
• More than 45 of worlds top 100 container ports
• Worlds manufacturing workshop for myriad
  consumer goods
• Some of its economies recording worlds highest
  growth rates
• All-time high foreign exchange reserves
• These are the best of times. For Asia-Pacific,
  times are propitious.
• Inexorable global thrust transforms economic and
  social architecture of the region.

Contd
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• Dynamics of Development
• today demand a different mindset
• Globalization implies unimpeded, free flow of
  goods and people
• Region will thus need to address towards
  integrated intermodal transport network
• Globalization and internationalization of
  economic activity is increasingly market-driven
• Market recognizes no borders and respects no
  nationalities
• contd

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• Historical Handicaps
• With a colonial pattern of primary structure
  many of our economies inherited skewed and
  underdeveloped infrastructure, large chunks of
  territory and people in the hinterland left out
  of the mainstream.
• Unbridged rivers and other impediments impacted
  transport facilities.
• Emergence of independent states in South Asia,
  for instance, saw them get increasingly isolated
  from one another. Distance between Dhaka and
  Lahore increased from 2300 km to around 7200 km.
• Land-locked countries in the region have been
  seriously handicapped.

Contd
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• Increased Mobility to Trigger Growth Impulses
• Natural markets for each other, these countries
  today realize great potential of mutual
  interchange intra-regional and inter-regional
  connectivity will be the engine of growth and
  understanding.
• Mobility of goods and people will command the
  centre-stage.

Contd
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• New Transport Structures will Foster Inclusive
  Growth
• Today, our region has come alive to grapple with
  stupendous challenges.
• Projects of immense importance and potential
  like Trans-Asian Railway and Asian Highway will
  knit our people together, integrate our economies
  further, and constitute vital lifelines for its
  rapid, inclusive growth and development.
• The TAR project will itself greatly help redress
  severe imbalances between coastal cities and
  towns, historically nurtured around seaports, and
  under developed, under-connected interiors.
  Through intermodal transfer facilities, new
  inland nodes will acquire seamless connectivity
  to rapidly globalizing economies.

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• These historical schemes and projects will help
  resolve old anomalies, dissolve disparities
• These new dreams enshrine a new vision and hope,
  especially for some 800 million of our people
  seething in abject poverty, in the quest for an
  inclusive growth, pulling these people in the
  interiors to the economic mainstream

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Some 45 of Top 100 Container Ports in the Region
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State-wise Status of Accessibility
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District-wise Incidence of Poverty
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Dry Port ICD/CFS Rationale Significance

• Dry port is a yard used to place containers or
  conventional bulk cargo, usually connected to a
  seaport by rail or road. - Wikipedia
• An ICD or a CFS, located away from a seaport,
  providing facilities for cross-border trade in
  close vicinity of production/consumption in
  hinterland, with linkages to gateway ports.
• A common user facility, for handling and
  temporary storage of import/export, laden/empty
  containers, for clearance by Customs for home
  consumption, warehousing, onward transit, or
  export.
• A CFS generally on off-dock facility close to
  servicing port, helping decongest port by
  shifting cargo and customs-related activities
  outside the port.
• Also set up inland for linkage to a regional
  rail-linked ICD and to gateway port(s) by road.
• In India, only 40 dry ports close to seaports
  all others 137 inland.

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• ? Advent of the box 2088.5
  has transformed international trade
  and commerce
• - with computer, container has revolutionali
  zed and brought about historic changes in our
  economic and social life
• ? Dry port help take seaport and gateway to
  inland center where action is
• - they facilitate and promote growth
  inland locations, clustering of
  economic activities, SEZs/SERs, etc.

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Important Ports of India
Of all container traffic handled at major and
intermediate ports in 2005-06, JN and Mumbai
ports alone accounted for over 61
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Total Cargo and Others at Major Ports 2005-06

• Total Cargo 423.41 m.t.
• General Cargo 130.81 m.t.
• Others 68.98 m.t.
• Containerised 61.83 m.t.
• Share of general cargo
• vis-à-vis Total Cargo 30.9
• Share of containerised cargo
• in General Cargo 47.3
• ___________
• Source India Ports Association

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Traditional Port Hubs, Emerging Inland Nodes

• Historically, industry grew largely around ports,
  old port cities emerging as mega metros.
• The western and northern hinterland together
  account for pre-dominant share of export-import
  containerised cargo
• Regional Share of CONCORs Container Traffic
  TEU 2005-06
• Region TEUNo. Share
• North North Central 825,124 53
• West North Western 383,318 25
• South South Central 268,632 17
• Central 62,196 4
• Eastern 17,444 1
• Total 1,556,714

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Container Terminals (ICDs/CFSs) Regional Tally

• Severe regional imbalance likely to be addressed
  in years ahead
• Parts of eastern region now agog with
  unprecedented potential of economic activity.
• Look East policy to intensify trade and
  investment exchanges

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Institutional Framework A Vital Factor

• IMC (Inter-Ministerial Committee)
• for appraisal and approval of applications for
  ICDs/CFSs
• Ministry of Commerce and Industry nodal
  agency,coordinating with Ministry of Shipping,
  Roads and Highways Ministry of Railways
  Ministry of Finance
• IMC approval implies
• single-window facility for mandatory clearances,
  payments, and incentives certification presence
  of Customs, banks, shipping lines and agents,
  NVOCCs, CHAs, transport operators.

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• A feasibility study precedes the proposal for
  an ICD/CFS
• a copy of the study accompanies application
• a minimum critical mass a necessity indicative
  norms
• for ICD 800 TEU/month
• for CFS 150 TEU/month.
• Legal and liability framework
• Multimodal Transportation of Goods Act, 1993
• Refinement of Motor Vehicles Act
• Single document of carriage for inland
  transportation with clear liability and quick
  claim settlement terms.

Contd
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• Public-Private Partnership
• Consistent with countrys concerted strategy,
  towards blending synergy and strength of state
  and private sectors in finance, management and
  technology, PPP steadily materialises in
  infrastructure sectors.
• All recent container terminals at ports heralded
  PPP concept, e.g., at JN port, Chennai,
  Tuticorin, Visakhapatnam, Cochin.
• New large CFSs developed in PPP mode in
  collaboration with CONCOR.
• Intermodal rail networks developed as PPP
  projects, linking Gujarat coast ports by Pipavav
  Rail Corporation and Kutch Railway Co.

Contd
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• Public sector Central Warehousing Corporation
  generated an ingenious model for its CFSs being
  managed and operated by private sector
  enterprises.
• Several inland CFSs uniquely managed as
  public-public partnership CONCOR as a Central
  sector PSU joined hands with many state
  warehousing corporations to optimally manage
  and operate them.
• Dry port development in India itself a good
  blend of private sector and state sector 108 of
  them set up by different public sector
  corporations, 69 others by private companies.
• Some 14 private sector companies now registered
  with IR for owning rolling stock and operating
  container trains in addition to CONCOR.

Contd
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• Customs clearance made easy
• Risk Management System (RMS) for selective
  screening of only high-risk cargo for customs
  examination.
• Faster delivery system by creating separate area
  in port premises earmarked for instant delivery
  of cargo to specified accredited importers.
• Simplified procedure for amendment of IGM
• Simplified customs procedure for transhipment
  between gateway port and dry port (ICD/CFS).
• LCL carrying containers allowed movement from
  one CFS to another CFS for final
  consolidation/stuffing.
• Customs messages exchange with ports, airports,
  ICDs/CFSs, CONCOR, banks and DGFT.
• Facility of customs duty payment through more
  banks and via e-banking.
• 24x7 operations.

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• Trade facilitation, cost reduction
• Appropriate rail/road connectivity
• Simplification, rationalisation of
  procedures/practices
• Efficiency, productivity in handling,
  transportation, storage
• Optimal utilisation of assets and manpower
• Direct stuffing of commodities
• Promoting factory stuffing / destuffing of
  containers door-to-door transit.
• IT platform needs attention
• - inter-linkages between concerned agencies and
  operators customs, shipping lines, ports,
  NVOCC/freight forwarders, customs brokers,
  banks, custodian, customers
• online trace and track system
• internet access, web-enabled, online data entry,
  online accounting and money transfer.
• Security problems balanced with interests of
  trade

Contd
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Retrospect, Prospect

• Indias container traffic aggregates just about
  1 of global container volumes lately, it has
  been growing fast, and expected to grow further
  exponentially.

• Indias container traffic recorded a 14 CAGR
  during 1992-2005 overall traffic at major ports
  rose at 7 CAGR.
• Containerisation share of about 11 of total
  cargo at major ports in 2000-01 increased to 16
  in 2005-06 this share projected to rise to 22.7
  by 2010-2011.

• All ports container traffic projection envisages
  growth from 4.61m TEU in 2005-06 to 17.98m TEU in
  2013-14 (15.10 m TEU at major ports and 2.88 m
  TEU at new intermediate ports).

Contd
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• Hinterland potential for container traffic
  estimated to be at least 70 actual movement of
  full containers from and to hinterland locations
  currently less than 35.
• Indicating gaps on account of infrastructural
  deficiencies and delays.
• Rail-borne container movement between ICDs and
  gateways currently in 32 range an optimal ratio
  at least 50.
• For want of adequate port infrastructure,
  overwhelming volumes traverse other regional
  ports like Colombo, Singapore, Dubai/Salala
  with resultant additional cost and transit time.

Contd
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• It is essential that seaports and dry ports
• constantly improve efficiency and productivity
  through entire supply chain
• enhance capacity for intermodal transfers and
  transit
• expedite programmed road and rail connectivity
  projects for ports
• operate double-stack container trains on
  north-west rail axis earliest.
• Reduction in transaction costs remains paramount
  necessity
• optimise productivity thro entire logistics
  chain at ports, inland terminals, during
  transit
• simplify pre-carriage, post-carriage
  documentation and procedures
• implement EDI for full interconnectivity among
  different stakeholders, service providers, and
  regulatory authorities.
• Explore and cater for vast potential of
  containerisation of domestic cargo conducive to
  better utilization of terminal facilities and
  equipment as much as energy and environment
  conservation.

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• Main Message We Carry With US
• - Region has some unique success
  stories-relevant and timely
• - There are several lessons to be learned from
  each other. No need to keep inventing the
  wheel.
• - India has been involved in developing an
  extensive dry port network, mostly linking
  interior centers with gateways, through
• - low cost terminals on modular pattern
• - increasingly rail-borne intermodal traffic,
  set up speedily, equipped with simple
  system and practices
• - active involvement of stakeholders-trade and
  industry, customs, ports, airports,
  shipping lines, airlines, railways,
  roads, customs brokers, transport operators.
• Contd

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• Concor has spearheaded the activities, combining
  benign bureaucracy with passionate
  entrepreneurship
• Today, the name of the game is
• - Speed
• - Adaptability
• - Innovation
• - Improvisation
• The acid test of all our diligence is to deliver
  the product faster and cheaper

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Asian Institute of Transport Development

• Set up in November 1989, Asian Institute of
  Transport Development (AITD) is an autonomous,
  non-profit institution engaged in research,
  studies and training in an inter-disciplinary
  perspective in the area of infrastructure with
  focus on the transport sector.
• Regional Linkages
• Has a membership of 14 countries mostly from
  South and South-East Asia.
• Has been granted special consultative status by
  the United Nations.
• MoU with UNESCAP to collaborate in research
  programmes, seminars, technical workshops and
  publications.
• Founder member of the Asia-Pacific Network for
  Transport and Logistics Education and Research
  (ANTLER), established by UN-ESCAP.