Circular No. 55 dated 30^th June 2000

A number of representatives has been received from trade and industry for allowing consolidation/ reworking of LCL cargo at gateway ports or at CFSs near gateway ports, for further despatch to the destination ports. The proposal is to create IIUBs near gateway ports where the LCL cargo brought from various ICDs/ CFSs will be reworked and thereafter sent to various destinations directly. It has been stated that at present, the LCL cargoes accepted by the shipping lines at hinterland ICDs/ CFSs are reworked at transhipment hubs etc. Singapore, Dubai etc., which adds to the overall costs, thus making Indian exports uncompetitive in international market. Creation of similar facilities in India would therefore help promote our exports. Major advantages to the country are stated to be savings a foreign exchange due to substantial reduction in freight charges incurred by shipper, better handling and safer delivery of cargo as the activity takes place under the supervision of Indian agencies, additional traffic generated at gateway ports in terms of TEUs and reduction of transit time.

Presently, as per Circular No. 57/ 98-Cus., dated 4-8-1998 [refer 1998 (102) E.L.T.T40] movement of LCL export cargo from inland ICDs/ CFSs to gateway port is permitted by bonded trucks. Such LCL cargoes are permitted to be further consolidated at gateway ports. But there is no system whereby LCL cargo can be congregated / consolidated at inland ICDs/ CFSs and carried to the HUB point for re-packing (carrier-wise) into separate containers as cargo. At present, containers once cleared and sealed at inland ICDs/ CFSs are not allowed to be reopened and reworked at gateway ports. Due to non-availability of this facility, exporters incur extra expenditure in exporting their LCL cargo. Ministry of Commerce has strongly recommended the proposal of trade and has stated that consolidation of LCL cargo at ICDs/ CFSs/ Ports would help promote the growth of containerisation from the hinterland and would also make the transportation cost effective to smaller players engaged in foreign trade. Further, it will be an important step in upgrading our infrastructure abilities.

The matter has been examined by the Board and it has been decided to allow the facility of congregation / assimilation of LCL cargo at the inland ICDs/ CFSs, movement of this cargo from ICDs/ CFSs to Hub points for further reworking and exports to destination ports. The procedure to be followed in this regard shall be as follows:

i.       The custodians of ICDs/ CFSs would permit shipping lines to accept LCL cargo from the exporters and allot nominated space at their ICDs/ CFSs for storage, examination and consolidation of such cargo.

ii.      The exporter shall be given a choice of indicating the shipping line to be used for shipment of his consignment or leave it to the custodian. The custodian shall nominate the shipping line destination-wise where such choice has been left to the custodian.

iii.     The consignment of one shipping bill should not be allowed to be moved in part.

iv.      After examination and clearance of LCL cargo, the packages opened for customs examination shall be sealed by Customs. the shipping line will  use identification mark in each package clearly indicating serial number of package, description of the goods and the total number of packages covered under that particular shipping bill, exporters identity and their own codified identity. As far as possible all the shipping lines will use such identification marks in different colours, so that these can be easily identified.

v.      After completion of Customs formalities, the packages would be handed over by the Customs to the custodian along with two transference copies of Shipping Bill, certified copy of invoice, packing list and other documents in sealed cover. The concerned shipping line will issue the Bill of Lading, a copy of which will be handed over to the custodian.

vi.      The custodian would consolidate the cargo irrespective of the shipping lines and transport the same in their containers, which will be stuffed and sealed in the presence of Customs. The container movement will be organised by the custodians either by rail and / or road depending on the availability of services.

vii.     At the gateway port, or some CFS near gateway port, both the transference copies of shipping Bill would be presented by the Custodian's representative to the proper officer of Customs who would verify the genuineness of documents and check the marks and numbers of individual packages. The customs officer would inspect the packages and endorse the transference copies of Shipping Bill and AR4 in the following manner "inspected and found in order". The custodian would hand over the cargo to respective shipping lines/ steamer agents. Such packages received from inland ICDs/ CFSs would be stuffed in containers by shipping lines in the presence of Customs.

viii.    The custodian of the gateway port of CFS near gateway port would maintain a tally sheet container wise, giving details of the export consignments, the previous Container No. Shipping Bill No. AR-4 No. and the details of new container in which goods have been reshuffled. After the reworking/ reshuffling of the containers, tally sheet should be signed by the representatives of the custodian of the CFS and shipping line as well as by the supervising Customs Officers.

ix.     After signing the tally sheet the Customs officer would indicate the container number in which such cargoes are stuffed on both the transference copies of shipping bill and AR-4, and retain one copy of such shipping bill. The other transference copy would be returned to ICDs/ CFSs from which the container originated.

x.      Custodians would, thereafter, use the same containers to bring back LCL imports to various ICDs and make arrangements to deliver these consignments to the consignees.

xi.     As earlier, the drawback would be paid at the inland ICDs/ CFSs immediately after the clearance of LCL cargo by Customs at inland ICDs/ CFSs without waiting for actual shipment of cargo from the gateway port.

xii.    The LCL cargoes cleared by Customs at inland ICDs/ CFSs under the scheme would not be subject to examination by Customs at the gateway port or at the CFS where LCL cargoes are allowed to be consolidated, unless the seals are found tampered with or there is specific intelligence, the orders from Assistant Commissioner / Deputy Commissioner giving the reason may be obtained before examining the said consignment.