A highly interactive session brought to the fore logistics issues of shippers and operational challenges with Customs, CFS and ports
Discussions in this session focused on issues faced by shippers and the evolving role of Customs and CFS. Bringing to the fore challenges faced while importing and exporting, Srinivas Rao, General Manager – Logistics, Gokuldas Exports said, “The freight forwarders sometimes charge exorbitantly for imports that are prepaid or on FOB terms.” He expressed the need for an agency to monitor the charges charged by freight forwarders. Another issue he raised was about the lack of transparency in billing by the CFS, as in certain occasions the fee charged by the CFS exceeds the value of the commodity. Again the pricing strategy is not uniform among the CFS. N Girish, Member, Bangalore Custom House Agents’ Association focused on measures implemented by CBIC. Starting of EDI, ICEGATE, RMS facility, 24/7 operations, implementation of SWIFT and e-Sanchit platform are some of the e-business initiatives of Central Excise and Customs Board. CBIC has also rolled out an integrated risk management system for all the partner government agencies (PGAs) to ensure the consignments are not selected by the agencies on routine basis for examination, but based on the principles of risk management. Detailing on the extended role of Customs Broker Girish said, the broker ensures smooth passage of the exim cargo while complementing the cost as well. He is more of a facilitator and monitoring agency, rather than being an enforcer and collector of taxes.
Reviewing the logistics scenario, R Srinivasan, Logistics Manager, H&M, said compared to the past year, things are improving. With digitalisation dwell time has decreased, but if we compare to Sri Lanka, China and Vietnam, there warehouses have both vertical and horizontal stacking. Physical inspection of cargo is ruled out in these countries, while it is still in practice by Customs in India. If we want to reduce the cost and time, we need to switch to smart warehousing rather than expanding the warehousing capacity.
“Major commodity moving out from the CFS is garments and the industry is doing great,” said E Ajay, Deputy CEO, HAL Cargo Complex CFS, as he proceeded to explain their role as a facilitator and representative of Customs. There is a lot of communication gap between exporters, freight forwarder, CFS and CHA. If you see the four CFS operational in the state there is nothing common in the rates offered and in fact the CFS compete to offer better rates to the shippers. Ajay detailed on the challenges faced by his CFS operating as a government entity. Operational and insurance costs are increasing but the CFS is not able to increase their charges due to competition.
Schemes such as AEO and DPD have tried to kill CFS. Even after introduction of AEO, HAL appoints freight forwarders for doing business, which underscores the lack of communication. Another ambiguity he pointed out was in use of e-sealing and RFID. HAL had appointed 18 e-seal vendors, but lack of compatibility among the e-seal readers has created issues and finally a group of e-seal vendors is jointly developing e-seal reader compatible for all.
“Six years back the cargo moving from Bangalore region was about 5000 teus and six years down the lane it has grown to 30,000 teus, which indicates the massive growth in this region’s trade,” commented Ennarasu Karunesan, CEO, Adani Ports & SEZ, Southern Ports. “Today we have enough ports, CFS and warehouses, so the focus has now come down to at what cost do we move the cargo?, at what speed and what is the reliability?” exclaimed Ennarasu. These three elements will matter the most in the next 10 years for our industry
