Centre issues guidelines to formalise operation of empty container depots

The Centre has issued guidelines to formalise operation of empty (sea) container yards in the country and establish an efficient operation of Empty Container Depots (ECDs). One of the major suggestions was that ECDs located in States/Union territories may be registered under the Shops and Establishment Act.

There are around 1,500 ECDs all around , which annually handles 17 million twenty foot equivalent (TEUs). Of this, 20-30 per cent will be in empty boxes in circulation. The highest concentration are in Mumbai and Chennai, sources said.

It was found necessary that the ECDs which play a pivotal role in storing empty containers for maritime logistics need to be strengthened by regularising their activities in a structured framework. This gives responsibility to the shipping lines operating in India to engage in fair trade practices and clearly defined contracts. This is expected to reduce the shipping cost.

It will also enable ECDs to develop adequate infrastructure for the trucking community, sources said.

As commercial establishments they should be registered with State authorities. They should be taking payments in online mode and pay the GST, sources said.

The Ministry of Commerce and Industry Department for Promotion of Industry and Internal Trade (Logistics Division) in its ‘issuance of suggestive guidelines for ECDs’ said the matter of inconvenience faced by EXIM trade regarding empty containers was raised by various associations at various forays.

The ECDs are usually the facilities set up to consolidate and store empty containers, repairs and are a critical component of the supply chain. To make the operation of ECDs more efficient and transparent, there is a need to prepare guidelines in this regard.

Furthermore, as per the discussion in the Joint meetings held with the Service Improvement Group, guidelines have been prepared in consultation with relevant stakeholders for further issuance to trade and concerned Ministries

The ECDs are set up to consolidate and store empty containers that are required for EXIM trade, on behalf of the shipping lines for onward transportation via land or sea route. They also facilitate repair of damaged containers, usually provide lif on and lift off service for loading and unloading of containers and are a critical component of the supply chain.

To make the operation of ECDs more efficient and transparent it is needed to formalise their establishment through their registration under extant Act of the States; for standardisation of infrastructure and facilities available at the ECDs; to rationalise the tariff and service charges and to digitalise the processes and transactions, which will result in uniformity and efficiency in operation.

To achieve this, the guidelines suggested ECDs located in States /Union territories may be registered under the Shops and Establishment Act of the respective State Government or under any other extant law, and the ECDs may have proper registration number, with details of their business and operations at a specific location.

Transactions related to the services entered by the ECDs between/among various parties should be through a GST invoice preferably through online mode.

Port Authorities and the Custom authorities at respective container handling ports may encourage the Shipping lines to enter into contracts with ECDs which are registered and their services like storage, cleaning, repair, inspection of empty containers are specifically identified in the contract entered with applicable charges, the guidelines said.

Shipping lines, Consignee, CHAs, Freight Forwarders, CFS operators may as far as possible only enter into contract with a registered ECD established under due processes where adequate infrastructure and amenities are provided

It is also necessary for ECDs to install RFIDs in the premises enabling the gate in and out movement of transport vehicles and use that information in effectively managing the entry and exit of transport vehicles to the ECD and avoid inordinate delay. NICDC Logistic Data Services (NLDS) may also facilitate this at ECDs in the country.

To prevent ambiguity in the provisions of these guidelines, The Ministry of Ports and Shipping and Waterways and State Maritime Boards and Customs may keep an oversight on the establishment and operations of ECDs operating in the hinterland ol respective port and lCDs, the guidelines said.