Railways cuts charges for moving containers

In a surprise move, the Railways has decided to charge less for moving some categories of containers.
After deciding, in November 2012, to raise haulage rates by up to 31 per cent in two instalments — in December 1, 2012, and February 1, 2013, the Rail Ministry has now decided to lower the rates by five per cent in two segments — 10-20 tonne cargo in twenty feet equivalent unit (TEU) containers, and 20-40 tonne cargo in forty feet equivalent (FEU) containers.

This follows a plea by the Association of Container Train Operators. The charges for movement of empty wagons will be cut by 13 per cent. The cuts become effective April 1.

Both Container Corporation of India (Concor), the largest container train operator with over 70 per cent of the market, and Gateway Distriparks Ltd (GDL), a listed firm, plan to cut tariffs. For the operators, haulage rate accounts for 65-70 per cent of operating cost.

According to Concor Managing Director Anil Kumar Gupta, “We are planning to pass on the benefit to customers. We will rework the tariffs.”

Sachin Bhanushali, Deputy CEO, Gateway Distriparks, explained: “In segments where we were losing our competitive edge with road transporters, the Ministry has reduced haulage rates by up to 8 per cent. GDL plans to pass on the benefits to its customers for loaded containers.”

The move is also good for other container players such as the shipping lines backed APL India Infrastructure and Hind Terminals.

Some of the other moves aimed at increasing containerised cargo movement are a 25 per cent reduction in rates for fruits and vegetables moved in containers by the National Horticulture Board and the Agriculture Ministry.

The Railways moved 37.24 million tonnes of container cargo in 11 months of this fiscal, registering a 7 per cent growth year-on-year.Before 2007, Concor, a listed subsidiary with a majority stake by Railways, was the only player in the segment.

By opening the market, the Railways allowed container train firms to invest in flat wagons that carry containers and book cargo from customers. However, investors accused Railways of increasing charges steeply and frequently making it difficult for them to operate.

The Railways, on its part, has maintained that instead of developing new markets to attract cargo from road to rail, many container train operators tried eating into Railways traditional customer base by targeting heavy cargo movement.

http://www.thehindubusinessline.com/industry-and-economy/logistics/railways-cuts-charges-for-moving-containers/article4546692.ece

Private container train operators demand tariff regulator

The Association of Container Train Operators, or ACTO, lobby group said Tuesday the government should set up a rail tariff regulatory authority for rational, transparent freight rates.

Indian Railways had opened up the rail transportation of containers in 2006 to private operators that had already invested more than Rs4,000 crore in wagons, containers and terminals in addition to Rs650 crore for securing a licence from the government.

However, the group said rail haulage charges have been increased eight times during the last seven years since deregulation, resulting in a cumulative increase of 73%-128% in different weight slabs, while tariffs for transport of bulk cargo by rail, in which investment in wagons is by the Railways themselves, has increased by a mere 32% over the same period.

The railway ministry prescribes haulage charges for transportation of containers by rail from time to time. These operators, including state-run Container Corp. of India Ltd, pay haulage charges to the ministry for using the railways’ track, locomotives, signalling infrastructure and staff for running their container trains to ports from inland locations and back.

http://www.livemint.com/Politics/ze9bGJtg216zKtFJsruZqO/Private-container-train-operators-demand-tariff-regulator.html

Rlys extends telescopic rates to containers’ hub-spoke operations

After administering a bitter dose of a steep haulage-rate hike to container train operators, the Railways has tried to apply balm by extending the telescopic rate benefit for hub-and-spoke operations.

A telescopic rate structure lowers the unit cost of transport containers booked for longer distances. The policy comes into effect from January 1. This benefit was withdrawn two to three years ago.

“The move will provide container operators some operational flexibility in train movement by extending telescopic benefit to containers booked from multiple destinations to a hub and then to the final destination. So, there is some saving in cost,” Amitabha Chaudhuri, General Secretary, Association of Container Train Operators, told Business Line.

Explaining the difference, Chaudhuri added, “At present, when a container moves from a hub to a final point, it is booked afresh, in the process doing away with telescopic benefit. Thus, the same box gets booked twice increasing our cost.”

The benefit will be particularly good for double-stack operations, as there is a 50 per cent discount for the containers stacked on top. Double-stack-container movements are allowed between West-Coast ports (Mundra and Pipavav) and some inland container depots in Rajasthan and Northern Capital Region (Concor’s Rewari, Adani Port SEZ’s Patli and Gateway Distripark’s Garhi Harsaru).

‘conditions attached’

Gateway Rail, the container rail movement arm of listed company Gateway Distriparks, said this policy would help it improve margins on routes that handle double-stack movement — the inland container depot at Garhi Harsaru and ports of Pipavav and Mundra.

Gateway Rail Freight Deputy CEO Sachin Bhanushali said: “Close to 80 per cent of total containers handled by the company go through Garhi Harsaru.”

Kribhco Rail Infrastructure’s Managing Director B.N. Shukla said it would take some time for them to quantify the benefits, as there are many conditions attached to the policy.

At present, hit by the overall slowdown and lack of terminals, most of the operators have stable rakes. Till recently, the level of stable rakes for various firms were as follows: Arshiya — six; Gateway Rail — two; B2B Logistics — three; Freightstar — five; Kribhco Rail Infrastructure — five; Hind Terminals — three; Sical — two; and Central Warehousing Corporation — one.

mamuni.das@thehindu.co.in

http://www.thehindubusinessline.com/todays-paper/tp-logistics/rlys-extends-telescopic-rates-to-containers-hubspoke-operations/article4223084.ece

Box train operators partially absorb rate hike under pressure

Faced with competition from within the container train segment, as well as the road sector, container train operators have been forced to absorb part of the haulage rate hike, which set in from December.

The Indian Railways increased haulage charges, which account for 60-70 per cent of operations cost for the train operators, by up to 22 per cent from December 1.

Container operators pay haulage charges to Indian Railways for their carrying their containerised cargo and flat wagons. There are 15 players in the segment, with incumbent Concor holding 75 per cent of traffic.

PARTIAL INCREASE

Container Corporation of India (Concor), Gateway Distriparks, APL-backed IIPL and MSC-backed Hind Terminals have increased container train movement tariffs in certain segments such as Ludhiana-Mundra, and Ludhiana-JN Port. But tariffs have not been increased in routes such as Kanpur-Mundra where the competition is high.

Concor has passed on less than 50 per cent of the total increase in cost it faces due to haulage rate hike.

“Given our nature of traffic mix, we would have had to pay Railways eight per cent extra haulage charges. Out of that, we have passed on 3.5-4 per cent increase on an average,” said Anil Kumar Gupta, Managing Director, Concor.

Gupta said it would be difficult to share route-specific data as it 638 streams where it operates. “We have partially passed on the hikes in specific routes based on the competition from other operators,” said L.R. Thapar, Chief Executive Officer, Hind Terminals.

STABLED RAKES

The hit has been hard for some entrants such as Kribhco Rail Infrastructure, which has stabled five rakes out of the eight it operated, because the operating losses were higher than the losses it incurred by just parking the rakes in sidings.

This is similar to that of shipping lines and airlines, who resort to keep their rolling stock capacity idle in slowdown instead of running regular services and booking losses.

“Most of our customers did not agree to take the entire hike. Some agreed to take the hike for loaded containers only,” said B.N. Shukla, Managing Director, Kribhco Rail Infrastructure.

Other players with focus in domestic segment that have stabled rakes include Arshiya Rail and Inlogistics.

TRAFFIC IMPACT

Since the cargo for container movement in December was already booked before the hikes were effected, impact on traffic volumes will be clear only by January, said Amitabha Chaudhuri, who heads NOL’s APL India Infrastructure.

APL’s IIPL passed on most of the rate hike to customers. Concor also stated that it is early to gauge any shift in containerised cargo movement between rail and road. “There is a strong resistance from the customers, who are already under pressure due to the general slowdown,” said Gateway Rail Freight Ltd’s Deputy CEO Sachin Bhanushali.

The potential exception could be lightweight containers, where there may be a shift from road to rail. “In line with the railways introduction of 0-10 tonne category, for which haulage charges are lower than the earlier 0-20 tonne category, we have dropped charges,” said Concor’s Gupta. This lightweight category of cargo comprises less than five per cent of container train traffic. At present, most of these lightweight boxes, which carry garments, consumer durables, spices and tyres, move on road.

EXIM BOXES

With the domestic business already under pressure, most container train operators had shifted focus to the export-import business of container movement, which is a relatively high margin business.

But, this year, the export-import container movement is also under stressed, as is evident from the port’s container handling data. For the April-November period of current fiscal, all major ports together handled 5.16 million teus, which is 0.6 per cent lower on a year-on-year basis.

Most of the key container ports – JN Port, Chennai and Pipavav Port – have handled lower number of containers during the period on a annualised basis. The only exception is Adani Port’s Mundra Port, which has seen a double digit growth in containers handled.

Haulage rates: Rlys may look at partial roll-back

The Railway Ministry might consider a partial roll-back of haulage charge hike proposed for container train operators.

Railway Minister Pawan Bansal on Wednesday said, “The hike was proposed after a discussion with the container operators. But, there appears to be some concerns of the operators (on the extent of hike). They have approached us. We will consider the issue. But we will go ahead with the implementation from December 1.”

The association of container train operators have approached the Ministry on the issue.

Meanwhile, following the Railway Ministry’s move to increase haulage charges, Container Corporation of India (Concor) has alerted its customers that it will increase fares in both export-import and domestic segment.

Gateway Distriparks Ltd has also said that it will partially pass on the hike to its customers.

mamuni.das@thehindu.co.in

http://www.thehindubusinessline.com/industry-and-economy/logistics/haulage-rates-rlys-may-look-at-partial-rollback/article4119844.ece

Published in: on November 25, 2012 at 11:55 am  Leave a Comment  
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Railway food prices to go up

Foodgrains, vegetables and fruit, among others, will be costlier because the Railways has decided to increase haulage charges for container train operators by 31%. Pawan Kumar Bansal is expected to elaborate on the decision in his first formal interaction with the media as railways minister on Wednesday.

Haulage charges, which container train operators pay the Railways for using the tracks, signalling systems and locomotives, will be increased in two stages — in December this year and February 2013.

A train’s cost of haulage from Delhi to Mumbai is currently Rs. 15,690. From February 1, it will be Rs. 20,590. Other essential commodities likely to be impacted include Basmati rice, soyabean, almonds and apples, besides garments, electronic goods, handicrafts, machinery and newsprint.
http://articles.timesofindia.indiatimes.com/2012-11-21/nagpur/35257857_1_pantry-car-poor-quality-food-deputy-station-superintendents
“We are demanding a rollback,” said Amitabh Chaudhary of the Association of Container Train Operators (ACTO).

The decision to hike passenger fares is likely to be kept on hold for the time being.

A second Shatabdi train from Delhi to Chandigarh and the flagging off of 20 trains are among other announcements Bansal is expected to make.

http://www.hindustantimes.com/India-news/NewDelhi/Railways-hike-may-push-up-food-prices/Article1-962096.aspx

Published in: on November 25, 2012 at 8:11 am  Leave a Comment  
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Railways hike may push up food prices

Foodgrains, vegetables and fruit, among others, will be costlier because the Railways has decided to increase haulage charges for container train operators by 31%. Pawan Kumar Bansal is expected to elaborate on the decision in his first formal interaction with the media as railways minister on Wednesday.

Haulage charges, which container train operators pay the Railways for using the tracks, signalling systems and locomotives, will be increased in two stages — in December this year and February 2013.

A train’s cost of haulage from Delhi to Mumbai is currently Rs. 15,690. From February 1, it will be Rs. 20,590. Other essential commodities likely to be impacted include Basmati rice, soyabean, almonds and apples, besides garments, electronic goods, handicrafts, machinery and newsprint.

“We are demanding a rollback,” said Amitabh Chaudhary of the Association of Container Train Operators (ACTO).

The decision to hike passenger fares is likely to be kept on hold for the time being.

A second Shatabdi train from Delhi to Chandigarh and the flagging off of 20 trains are among other announcements Bansal is expected to make.

http://www.hindustantimes.com/India-news/NewDelhi/Railways-hike-may-push-up-food-prices/Article1-962096.aspx

Published in: on November 25, 2012 at 8:03 am  Leave a Comment  
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Rail movement of containers to get costlier by 31% in 2 stages

Moving goods in container trains may get costlier.

The Indian Railways — which moves 77 million tonnes of goods via containers every year — has decided to increase haulage charges for container train operators by up to 22 per cent with effect from December.

That’s not all. There will be another round of increase after two months. Thus, with effect from February the charges will go up by up to 31 per cent against today’s levels.

Haulage charges — which container train operators pay Indian Railways for using the tracks, locomotives and signalling infrastructure — account for 60-70 per cent of their operating cost.

The Ministry permitted 16 outfits to run container trains. They include listed companies such as Container Corporation of India (Concor), Arshiya International, Gateway Distriparks Ltd; and those backed by shipping lines such as Hind Terminals and APL India Infrastructure.

HIKE IN THE OFFING

The hike varies depending on weight. For moving empty containers on flat wagons, or flat wagons without containers, the hike is 22 per cent from December, and 31 per cent from February 1. Due to India’s export-import imbalance, operators have to increasingly move empty containers on the route.

The Railways has also introduced a 0-10 tonne weight, which will be charged at close to current 20-tonne level charges.

IMPACT

The operator margins will be hit, while some of the hike will get passed on to the customers. Shocked by what it called the double-whammy, the Association of Container Train Operators (ACTO) said both the export-import and domestic business will be badly hit due to the hike.

“Announcing two rounds of hike to be implemented in two months is unprecedented. We have decided to approach the Ministry for lowering it,” said Amitabha Chaudhuri, General-Secretary, ACTO. Chauduri also heads the NOL’s APL IIPL.

On whether Concor will pass on the hike to its customers, Managing Director Anil Gupta said that tariff review will be done on a selective basis for specific routes as customers cannot be driven away.

Gateway Rail Freight Ltd’ Deputy CEO Sachin Bhanushali said that some of the hike will have to be passed on to customers. The 10-20-tonne container business will move to road if the entire hike is passed on, he said.

mamuni.das@thehindu.co.in

http://www.thehindubusinessline.com/industry-and-economy/logistics/rail-movement-of-containers-to-get-costlier-by-31-in-2-stages/article4106136.ece

Rlys’ private freight terminals biz draws Tata Steel, 21 others

Indian Railways’ private freight terminals (PFTs) appear to be catching up slowly. A host of companies, including Tata Steel, Kribhco Rail Infrastructure, Concor, Sahani Logistics, India Glycols-backed Kashipur Infra Freight Terminals, Central Warehouse Corporation, and Rajasthan Spinning Mills are queuing to be operators.

The Ministry now has close to 35 proposals for PFTs from 22 companies. Of this, the Railways has notified eight terminals, approved 15 and the remaining are under consideration. Setting up a PFT will require Rs 100-150 crore.

The gene-pool of companies is varied — logistics players, container train operators, mining companies such as Goa-based Fomento Group, and commodity trading firms such as Navkar Group.

WHY PFT

A PFT operator can handle various types of goods for the Railways and provide value-added services such as storage and distribution. This is different from private rail sidings where Railways permitted specific type of cargo to be handled, usually on a captive use basis for use by the company that built the siding.

There were two reasons for Railways to come out with a PFT policy, apart from the fact that land acquisition has become difficult.

First, private good sidings that were built years ago in outskirts are now a part of the cities.

These sidings, which are small going by the current norms, and cannot accept or despatch cargo during the day as large trucks entries are restricted for most part of the day. So, the rail freight customer evacuates cargo and moves to another distribution point. PFTs — which will be much larger and located in outskirts — are expected to eliminate this layer of handling and reduce costs for customers.

Also, by allowing companies to earn revenue by handling cargo of various types, the Railways expects to get some incremental cargo, and attract some cargo from the road as well.

BROWNFIELD BUSINESS

Many rail private sidings are converting their sidings to PFTs. Close to half the PFT proposals are brownfield.

Many container train operators are also converting their inland container depots (ICDs) to PFTs so that they can handle non-containerised cargo as well.

Mamuni.das@thehindu.co.in

http://www.thehindubusinessline.com/industry-and-economy/logistics/rlys-private-freight-terminals-biz-draws-tata-steel-21-others/article4095552.ece?homepage=true