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Though Customs has become a facilitator, cooperation is not forthcoming from field level Customs executives: Paramount Forwarders

Mr S Nataraja, Proprietor of leading Chennai based Logistics firm Paramount  Forwarders has been on cargo handling business for over forty years. He had held several positions in the Chennai Custom Brokers Association in the last two decades. In the keenly contested elections held last year, Mr Nataraja and his panel were elected Office bearers of the prestigious Association by a large margin. A soft spoken person he answers wide ranging questions on the Shipping and Logistics Industry in a wide ranging interview to Sagar Sandesh.

SS: Customs houses in the country, far from being an enforcement agency have become facilitators to trade in the last few years thanks to the implementation of Ease of doing Business. Are the trade friendly measures of the Customs adequate? What needs to be done to take the facilitation measures forward?

SN: Customs have shifted their role from being regulator to become a facilitator to the trade in the last few years following the implementation of ease of doing business by both central and state governments. Perfect understanding has been reached between the trade and the higher echleons of the Customs including commissioners and chief commissioners in the implementation of the governmentís policies in a manner friendly to the trade.

Cooperation however is not forthcoming from the field level Customs Executives like Appraising officers, Preventive Officers and Examining officers. They are yet to get absorbed to the governmentís thinking in the matter and are not up to the requirement of the trade. Therefore we face lot of issues at the ground level in dealing with them.

The trade expects the same level of cooperation that they receive from high officials of customs to be extended by lower level officers. But this is not happening.

 Q) Have the trade and the customs house agents got over the technological glitches they faced during the initial phase of the implementation of the Goods and Services Tax? What are the problems they continue to face and how they could be overcome?

ANS) The trade welcomes the governmentís decision to implement GST that is one nation one tax. It was implemented from July last year. The moment the new tax regime came into force the trade faced technological glitches. But they were slowly overcome through periodic meeting with the Customs Officials. Most of the issues have been sorted out through dialogue,

Some problems however continue to persist like Export General Manifest not filed and errors in export general manifest. The issues were discussed among the stakeholders in the trade and the customs officials to identify the problem. We have (the trade) have submitted its findings to the Customs which could help redress the issues. All the issues they face on technological front will be resolved in a week or two.

Q) With the digitization of cargo handling operations, technology will play a major role in future. Are the customs house brokers adequately trained to handle the transformation in the Operations?

ANS) The frank answer to this question is that the brokers are not fully equipped for the change. The government is implementing new schemes every day every week and every month in its pursuance of ease of doing business.

 

We take the help of our Apex body Federation of Freight Forwarders Association of India to organize regular training programs for the customs house brokers and the staff of customs broking houses. The idea is to make them understand the requirements of digitization so that they can perform their work without hassles.

Regular training programs are being organized to help them acquire expertise so that they could assist in speedy clearance of cargo.  Technological advisories on dos and dontís are sent to the members through whatís up and mails so that they have better understanding of the digitization.

 Q) Industries have invested considerable funds to create Container Freight Stations around the Ports to minimize congestion. They have achieved the purpose for which they were set up. They are likely to go out of business with the introduction of Direct Port Delivery System. Can you suggest alternate model of business for them so that the infrastructure they had created over the years is fully put to use?

ANS)  We are part and parcel of the Container Freight Station business. Ten years ago, the number of container freight stations around the major ports can be counted. We suggested to both the Customs department and the stakeholders to create more container freight stations based on the revenue generated from the EXIM Trade.

There are at present 31 container freight stations operating in and around Chennai port. This is the case in all major ports of the country. Ten years ago their number around Chennai Port was hardly five. That they will go out of business with the introduction of direct port delivery is not correct.

The container throughput at Chennai portís two terminals touched an all time high of one lakh seventy seven thousand TEU during the last month of the last financial year (March 2018)

Out of the 41 per cent DPD generated from Chennai port during March this year, nearly nine per cent is directly routed through Container freight stations. Thus the effective DPD turn over goes down to 32 per cent and the rest of the containers are handled at container freight stations. Hence the belief that container freight stations would go out of business with the introduction of direct port delivery system is not correct.

The trade needs CFSs to store their cargo on a temporary basis. They also need the storage at CFS so that cargo from containers is unloaded fast and the boxes sent back to the steamer agents to avoid demurrage. Hence DPD will have only marginal impact on the turn-over of CFSs.

Our suggestion to the Container Freight stations is increase the covered storage capacity so that they could serve as Ware Houses as well. This would help them to balance their turn over.

Q) Out of fifteen million TEUs handled at major ports of the country, hardly two million TEUS seem to be the contribution of Ports in the East Coast. The rest are handled at JNPT and Mundra Ports in the West Coast. Do you think the railway infrastructure from Central India to East Coast ports needs to be strengthened in an effort to correct the imbalance? Is there a strong case for railway tariff to be made competitive to attract cargo from northern India to east coast ports?   

ANS) We feel that CONCOR India and the Railways need to be pro active and strengthen their services to the East Coast Ports. CONCOR   should also rework its freight rates in order to compete with road transport.  If the tariff and services are attractive, the trade would increasingly use the services of the Railways.The cargo handled at these ports would then go up. Trade prefers to use railways to handle more cargo since it involves saving in time and cost.

Q) Container rail connectivity from Chennai Port is very poor. There are no scheduled services from Chennai to Hyderabad or North Indian cities  Private Operators who came forward to operate freight services from Chennai port to Bengaluru last year gave up within a few months. What are the reasons that forced them to pull out in such a short time?

It is absolutely correct that Container connectivity to ports in the East Coast including Chennai and Tuticorin is very poor. Neither CONCOR nor the Railways improve their freight services to the east coast nor would they allow the private parties to perform. They practice the dog in the manger policy.

Private freight operators though they own the flats to carry containers depend on CONCOR for engines and the railways for the tracks to cover the distance. Both the railways and the CONCOR proved to be an irritant for the Private Operators  and hence they had to pull out of Chennai Port Bengaluru service last year.

Instead of waiting for return cargo CONCOR should start promotion services from Chennai to Guntur, Hyderabad, Nagpur, Hosur and Coimbatore. Both railways and CONCOR should start end to end services rather providing services between railway stations.

Ninety per cent of CONCOR officers are salary earners and have no incentive to be trade friendly.

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