Inland Container Depot – Export & Import – India

 An Inland Container Depot (ICD) is a container storage facility situated in the hinterlands, away from any major port. Shipping companies use ICDs to store and move containers before and after transporting them to the seaport.

As they are located away from the sea or any major river routes, Inland Container Depots are also sometimes referred to as the ‘Dry Ports.’

To monitor the growth of ICDs/CFSs, a regulatory authority in the form of an Inter-Ministerial Committee (IMC) under the chairmanship of the Additional Secretary(Infrastructure), Ministry of Commerce, has been set up. It comprises representatives from the Department of Revenue, Ministry of Surface Transport, Ministry of Railways and the Ministry of Commerce. The Committee considers the proposals submitted by the Public Sector as well as Private Sector entrepreneurs for setting up of new ICDs/CFSs at different centres in the country and monitors their progress. There were about 30 ICDs/CFS prior to the constitution of the IMC. After its constitution in the year 1992, the IMC has approved about 135 ICDs/CFS and out of a total of 165 ICDs/CFSs, about 100 are reported to be already in operation and others are in pipeline. Top freight forwarding companies in India give herein this article a detailed account of the present trend in international trade,i.e., containerization of cargo.

Why is Inland Container Depot important?

At an ICD, the sea custodians, freight forwarders, customs brokers as well as officials from the customs department provide their services to the importers and the exporters. They process their shipment near their godowns and factories, away from the far-off ports. ICDs help de-stressing and decongesting the ports where the storage spaces are limited due to the land’s judicial use.

Functions of Inland Container Depot

Inland Container Depots carry out the following functions:

·         ICDs are physical facilities that store the containers temporarily before they are moved to the port and loaded on the ships. Exporters can also place their cargo inside the containers at an ICD.

·         Along with being a storage facility, ICDs can also provide export and import customs clearances. All the services that are provided at a port, can also be availed at the ICD situated far away from the port.

·         ICDs also act as servicing and repair facilities for containers and other moving equipment.

Advantages and disadvantages of Inland Container Depot

·         Inland Container Depots provide facilities like custom clearances as well as other export/import procedures in the mainland, near large industrial complexes, away from the seaports. Once the cargo is cleared at the ICD, it does not have to go through customs at the port and is cleared for export.

·         ICDs reduce the overall movement of empty containers by providing consolidation facilities for Less than Container Load (LCL) shipments in the hinterland.

·         ICDs ensure that the costs of exporting and importing goods remain competitive by providing all the facilities in the hinterland.

·         ICDs help in increasing the exports of a country by building feeder infrastructure for the ports.

·         ICDs help in decongesting vital port spaces.

·         The benefits of containerization can be fully availed only when we have a good network of ICDs. Exporters can take advantage of containerization when they can export their cargo via ICDs.

Import process at ICDs

The container movement is, generally operated by the Container Corporation of India. When the importers intend to import the goods through a particular ICD they should suitably advise the foreign suppliers so that the containers are manifested to that particular ICD. When such containers are landed in a gateway port, (Seaport) they are arranged to be transported to the ICD concerned by the Steamer agent through the Container Corporation of India or any other authorized agency, either by rail or road. Once the containers are received in the ICD, they are transported to the Container Freight Station where the importers have to file the Bill of Entry and other documents as they do in the case of clearance through gateway ports or Airports.

Export process at CFS

The exporters may take the goods to the ICD/CFS and file the Shipping Bill and other documents. The goods are examined by the Customs Officers and they are stuffed into the containers and thereafter the containers are sealed. Such Containers are transported to the Seaports (gateway ports) by the Containers Corporation of India or any other authorized agency, either by rail or road, when the containers are loaded into vessels (ships) for delivery of the same at the specified foreign port.

In the case of export through ICD, the exporters are requested to file two additional copies of Shipping Bills known as “Transference Copies” along with other documents as discussed. The rest of the procedure is the same as in the case of exports through Customs Port/ Airport.

Existing Guidelines for approval of ICD/CFS

The proposal for setting up of ICDs/CFSs are examined by the IMC on the basis of the following guidelines:

a.       Feasibility report: A survey/feasibility study must precede the setting up of ICDs/CFSs and a copy of the report should invariably accompany the application for setting up such a facility. The facility has to be economically viable for the management and attractive to users, to the railways for full train movements; and to other transport operators; shipping lines; freight forwarders, etc.
In the background of growing international trade, the infrastructure facilities have to precede the actual generation of demand. This is particularly important, as such facilities have a long gestation period for being fully operationalised. For the approval of an ICD/CFS, the following minimum level of traffic volume is prescribed:
For ICD - 6,000 TEUs per year (Two way)

For CFS - 1,000 TEUs per year (Two way)

b.      Land requirements: For the ICDs/CFSs proposed to be set up outside limits of major cities, a minimum of 3 acres of land is required and for such facilities inside city limits /port area, a minimum area of 1 acre (about 4500 sq. mts) is required.

c.       Design and Lay-out of ICD/CFS: The design and layout should be the most modern & state-of-the-art, equipped with mechanical/electrical facilities of international standards. The layout should allow smooth flow of containers, cargo and vehicles through the ICD/CFS and it should take into account initial volume of business, estimated volume in 10 years and the type of facilities exporters would require.

d.      Equipping the ICD/CFS: The ICD/CFS should plan for the most modern handling equipment for loading, unloading of containers from rail flats, chassis, their stacking, movement, cargo handling, stuffing/de-stuffing, etc.

e.       Railhead ICDs: The parties desirous of setting up a rail-based ICD, have to provide at their own cost all infrastructure facilities including land, track, handling equipment for containers, maintenance of assets including track, rolling stock, etc. as per extant railway rules applicable to private sidings.

f.       Tariff : Tariff structure and costing is to be worked out as a part of the feasibility study

g.      General: The main function of an ICD/CFS is receipt, despatch and clearance of containerised cargo, the need for up-to-date inventory control and tracking system to locate containers/cargo is paramount. Each functional unit of the facility (e.g. siding, container yard, gate, stuffing, de-stuffing area etc.) should have up to date, and where possible online information about all the containers etc., to meet the requirements of customers, administration, railways etc.

Difference between Container Freight Station (CFS) and Inland Container Depot (ICD)

Although ICD and CFS perform a lot of similar operations, they are two different entities.

A CFS is located near a seaport and mainly consolidates and segregates the cargo. CFS majorly handles LCL shipments, since they require consolidation services. CFS is set up to decongest the ports and free up the valuable physical space near the sea.

ICDs are located far away from the ports and connect the ports with the hinterlands. All the customs related services that are available at the ports, can also be availed at the ICDs, along with consolidation and storage of cargo.