UN-ESCAP

Committee on Managing Globalization

(Third 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

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

 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

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

Increased Mobility to Trigger Growth Impulses

Natural markets for each other, these countries today
realize great potential of mutual interchange; intraregional and inter-regional connectivity will be the
engine of growth and understanding.
Mobility of goods and people will command the centrestage.

Contd

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 TransAsian 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, underconnected interiors. Through intermodal transfer facilities,
new inland nodes will acquire seamless connectivity to
rapidly globalizing economies.

 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

Some 45 of Top 100 Container Ports in the Region

State-wise
Status of
Accessibility

District-wise
Incidence of
Poverty

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.

Advent of the box: 20*8*8.5 has

transformed
international
trade
and
commerce
with
computer,
container
has
revolutionalized 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.

Important
Ports of India
DELHI

MUNDRA
KANDLA

KOLKATA

PIPAVAV

HALDIA

JN PORT

PARADIP

MUMBAI
VISHAKAPATNAM
MORMUGAO
NEW MANGALORE

CHENNAI
ENNORE

COCHIN
TUTICORIN

Of all container traffic handled at major and intermediate ports in 200506, JN and Mumbai ports alone accounted for over 61%

Total Cargo and Others

at Major Ports: 2005-06
Total Cargo

423.41 m.t.

General Cargo

130.81 m.t.

Others
Containerised

68.98 m.t.
61.83 m.t.

Share of general cargo

vis--vis Total Cargo
Share of containerised cargo
in General Cargo
___________
Source: India Ports Association

30.9 %

47.3 %

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 predominant share of export-import containerised cargo:

Regional Share of CONCORs Container Traffic: TEU: 2005-06

Region
North & North Central
West & North Western
South & South Central
Central
Eastern

TEU:No.
825,124
383,318
268,632
62,196
17,444

Total

1,556,714

Share: %
53
25
17
4
1

Container Terminals (ICDs/CFSs):

Regional Tally
Region

21%

5%

29%

39%

6%

CONCORs

Others

Total

Northern India

15

22

37

Southern India

10

58

68

Western India

13

39

52

Central India

Eastern India

11

Total

55

122

177

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

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.

 A feasibility study
ICD/CFS

precedes

the proposal for an

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

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

 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

 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 ebanking.
24x7 operations.

 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

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.
Share of Container Traffic at Ports
25
22.7
20
Percentage

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 200001 increased to 16% in 2005-06; this
share projected to rise to 22.7% by
2010-2011.

16

15
10

11

5
0
2000-01

2005-06

2010-11

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

 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
deficiencies and delays.

account

of

infrastructural

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

 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.

 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

 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

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 SouthEast 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.