‘Dedicated freight corridor a game changer’
24 Nov 2013 6:48 PM GMT
Set up in 1988, Container Corporation of India (CONCOR) is a miniratna public sector
enterprise under the ministry of railways. It provides multi-modal logistics support for domestic and external trade. Its core businesses are cargo carriers, terminal operations and warehouse operations. In this interview, Anil Gupta talks about the challenges faced by the PSU and its
expansion plans. Edited excerpts:
How fast is CONCOR growing?
We were growing at a rate of 13-per cent+ CAGR (compound annual growth rate) till 2008. Since October 2008 we have been affected by the global recession. In the last five years CAGR has gone down to around 3.5 per cent. But this year we are expecting to grow at around 10 per cent.
Is the container market in India very competitive?
There are 17 licenced container train operators in India and we are one of them. All the players are fighting for the limited volume because of the global recession. Once that ends there will be enough share for everyone. However, CONCOR has been able to retain the major market share which is around 75 per cent.
Is the growth of CONCOR proportional to the growth of the market?
In the last three years, CONCOR is growing at a relatively higher rate than the growth of the all the players put together. Our market share, which had declined to 72 per cent, is 76 per cent now. The growth rate has been affected by the global recession and the present market condition. Exports from India are not growing as compared to imports. As a result there is a heavy import-export imbalance which is affecting all the players, including us.
How was CONCOR able to do so?
CONCOR has a very large customer base which has helped us even during adversity. We have the largest terminal base with 63 terminals. We are covering each and every corner of the country whereas our competitors are confining themselves to only some areas. We also have the advantage of good frequency of trains. There is service of eight or nine trains at Tughlakabad ICD (inland container depot) every day. So even if the container misses the first train, it can go in the second or ninth train the same day. But a private operator may have a train which runs once in four-five days. So customers are more comfortable with CONCOR. Our quality of service is by far the best. We have a very efficient tracking system. Customers can log into the website and track the containers. They can predict reasonably well when their container is going to arrive. We do a customer satisfaction survey every year as a part of our MoU with the government of India. It is an independent survey done by the professional bodies. They have been giving us very good ratings. Last year the rating was above 89 per cent.
Does CONCOR have any global ambitions?
We already have one terminal operating in Nepal. This is the only rail-linked ICD in Nepal, where Raxaul is the Indian station and Birganj is the Nepalese station. This ICD has been built by Nepal with the help of Asian Development Bank and we are managing it. We are planning to extend our services to other neighbouring countries as well. We have been exploring Bangladesh and are trying to link our ICDs in Dhaka. There has been no proper response from the Bangladesh authorities yet. Similarly, we have made proposals to the Sri Lankan government and it port authorities for starting multi-modal (services) there. We have the ambition to associate ourselves in building up the infrastructure of multi-modal in African and Latin American countries if the opportunity arises. We are in contact with different people; we are looking at tenders being floated there and the local requirements. But nothing concrete has emerged so far.
Is CONCOR awaiting Navratna status?
Our company was cleared for the grant of Navratna status by a committee of secretaries almost five years ago. But they made a condition that this would be implemented once the post of managing director is converted to that of chairman and managing director. Initially the railway ministry was hesitant. Railways have around 12 enterprises and they have to implement the rule uniformly. This year railways have reviewed the entire situation and has agreed to have the post of chairman cum managing director at all its PSUs except two – IRFC and DFCCIL (Dedicated Freight Corridor Corporation of India). Our proposal was again sent to the department of public enterprises (DPE) to activate the old sanction. But we were asked to submit a fresh proposal which we did. The government will take action after the railway board submits the proposal to DPE.
What motivated CONCOR to develop an integrated logistics park in Visakhapatnam?
During 12th five-year plan we have ambitions to develop almost 15 new facilities, all of which will be integrated logistics park. Visakhapatnam is one such facility. Till now CONCOR has only been running and developing container terminals for handling two kinds of containers – one for international export and import and the other for domestic cargo movement business. But all our new facilities will be logistics parks which will have a bulk handling area in addition to an export-import terminal and a domestic terminal.
Railways have permitted us to handle railway wagons in the private freight terminals. Our new terminals will be private freight terminals, where we would handle containers as well as non-containers.
There is a lot of demand for warehousing which will be generated by GSP and retail. At the same place we will have warehouses for catering to the requirement along with road transport and trans-shipment facilities. It will be one composite place where you could handle everything. Today if a wagon comes to a railway station it has to be unloaded within a specified time frame. If 3,000 tonnes are coming in for the customer, he has to make arrangements for unloading this at the railway goods shed and then take it further. The customer does not have the space to keep such large containers. They want only 300-500 tonnes in a day. But once our logistic parks are developed, goods can be kept there and could be delivered as and when the customer wants. This would stop all the interim costs being incurred currently would stop. We are also planning to implement scientific handling of some cargo like cement. Visakhapatnam is one of these facilities which we are developing on around 100 acres of land. We already have a container freight station (CFS) in Visakhapatnam which is chock-a-block full. This would be developed in two phases. The first 10 acres we are developing to build another CFS which will be rail linked. The remaining 90 acres will be used for developing rail sightings, bulk handling, having a proper export-import and domestic
terminal, warehousing etc.
How will CONCOR benefit from the upcoming dedicated freight corridor (DFC)?
Railways are doing a great thing by creating capacity ahead of demand. DFC will change the entire freight scenario in the company. It will be a game changer. Today we run a train of 90 TEUs. In DFC we will run a train of 400 TEUs. Today one train takes around 40 hours from here to Jawaharlal Nehru port (Mumbai). From Mundra and Pipavav it takes about 60-70 hours (to reach here). Once DFC comes up the trains from Mundra, Pipavav and JN port should be here within 24 hours. Many of the proposed 15 facilities will be on the DFC. Four of them are confirmed, others we are trying. We are looking for land; we are talking to state governments and different bodies. One facility has already come on a place called Kathuwas which is around 35 km short of Rewari (near Delhi). We are already operating the facility. Today it is into the current existing rail corridor. Once the DFC comes up it will not take us more than a week to link ourselves to DFC. This facility is already being planned with all the dimensions of DFC. Once the DFC connection comes, once the rail route is laid by companies given the contract by DFCCIL we will be able to link to it and add more connectivity. DFC might fully come by March 2017 but some patches of DFC will be available for increasing the existing line capacity and we will make use of that. Double stack trains are already running between Mundra, Pipavav and Ghatua terminal in a regular manner.
What kind of challenges the company has faced in the last few years?
One of the challenges we have faced is slow growth. The second big challenge is the export-import imbalance, imports have been higher and exports have been lower. As a result, a lot of times empty containers are required to be run which means logistics costs go up. Governance Now
enterprise under the ministry of railways. It provides multi-modal logistics support for domestic and external trade. Its core businesses are cargo carriers, terminal operations and warehouse operations. In this interview, Anil Gupta talks about the challenges faced by the PSU and its
expansion plans. Edited excerpts:
How fast is CONCOR growing?
We were growing at a rate of 13-per cent+ CAGR (compound annual growth rate) till 2008. Since October 2008 we have been affected by the global recession. In the last five years CAGR has gone down to around 3.5 per cent. But this year we are expecting to grow at around 10 per cent.
Is the container market in India very competitive?
There are 17 licenced container train operators in India and we are one of them. All the players are fighting for the limited volume because of the global recession. Once that ends there will be enough share for everyone. However, CONCOR has been able to retain the major market share which is around 75 per cent.
Is the growth of CONCOR proportional to the growth of the market?
In the last three years, CONCOR is growing at a relatively higher rate than the growth of the all the players put together. Our market share, which had declined to 72 per cent, is 76 per cent now. The growth rate has been affected by the global recession and the present market condition. Exports from India are not growing as compared to imports. As a result there is a heavy import-export imbalance which is affecting all the players, including us.
How was CONCOR able to do so?
CONCOR has a very large customer base which has helped us even during adversity. We have the largest terminal base with 63 terminals. We are covering each and every corner of the country whereas our competitors are confining themselves to only some areas. We also have the advantage of good frequency of trains. There is service of eight or nine trains at Tughlakabad ICD (inland container depot) every day. So even if the container misses the first train, it can go in the second or ninth train the same day. But a private operator may have a train which runs once in four-five days. So customers are more comfortable with CONCOR. Our quality of service is by far the best. We have a very efficient tracking system. Customers can log into the website and track the containers. They can predict reasonably well when their container is going to arrive. We do a customer satisfaction survey every year as a part of our MoU with the government of India. It is an independent survey done by the professional bodies. They have been giving us very good ratings. Last year the rating was above 89 per cent.
Does CONCOR have any global ambitions?
We already have one terminal operating in Nepal. This is the only rail-linked ICD in Nepal, where Raxaul is the Indian station and Birganj is the Nepalese station. This ICD has been built by Nepal with the help of Asian Development Bank and we are managing it. We are planning to extend our services to other neighbouring countries as well. We have been exploring Bangladesh and are trying to link our ICDs in Dhaka. There has been no proper response from the Bangladesh authorities yet. Similarly, we have made proposals to the Sri Lankan government and it port authorities for starting multi-modal (services) there. We have the ambition to associate ourselves in building up the infrastructure of multi-modal in African and Latin American countries if the opportunity arises. We are in contact with different people; we are looking at tenders being floated there and the local requirements. But nothing concrete has emerged so far.
Is CONCOR awaiting Navratna status?
Our company was cleared for the grant of Navratna status by a committee of secretaries almost five years ago. But they made a condition that this would be implemented once the post of managing director is converted to that of chairman and managing director. Initially the railway ministry was hesitant. Railways have around 12 enterprises and they have to implement the rule uniformly. This year railways have reviewed the entire situation and has agreed to have the post of chairman cum managing director at all its PSUs except two – IRFC and DFCCIL (Dedicated Freight Corridor Corporation of India). Our proposal was again sent to the department of public enterprises (DPE) to activate the old sanction. But we were asked to submit a fresh proposal which we did. The government will take action after the railway board submits the proposal to DPE.
What motivated CONCOR to develop an integrated logistics park in Visakhapatnam?
During 12th five-year plan we have ambitions to develop almost 15 new facilities, all of which will be integrated logistics park. Visakhapatnam is one such facility. Till now CONCOR has only been running and developing container terminals for handling two kinds of containers – one for international export and import and the other for domestic cargo movement business. But all our new facilities will be logistics parks which will have a bulk handling area in addition to an export-import terminal and a domestic terminal.
Railways have permitted us to handle railway wagons in the private freight terminals. Our new terminals will be private freight terminals, where we would handle containers as well as non-containers.
There is a lot of demand for warehousing which will be generated by GSP and retail. At the same place we will have warehouses for catering to the requirement along with road transport and trans-shipment facilities. It will be one composite place where you could handle everything. Today if a wagon comes to a railway station it has to be unloaded within a specified time frame. If 3,000 tonnes are coming in for the customer, he has to make arrangements for unloading this at the railway goods shed and then take it further. The customer does not have the space to keep such large containers. They want only 300-500 tonnes in a day. But once our logistic parks are developed, goods can be kept there and could be delivered as and when the customer wants. This would stop all the interim costs being incurred currently would stop. We are also planning to implement scientific handling of some cargo like cement. Visakhapatnam is one of these facilities which we are developing on around 100 acres of land. We already have a container freight station (CFS) in Visakhapatnam which is chock-a-block full. This would be developed in two phases. The first 10 acres we are developing to build another CFS which will be rail linked. The remaining 90 acres will be used for developing rail sightings, bulk handling, having a proper export-import and domestic
terminal, warehousing etc.
How will CONCOR benefit from the upcoming dedicated freight corridor (DFC)?
Railways are doing a great thing by creating capacity ahead of demand. DFC will change the entire freight scenario in the company. It will be a game changer. Today we run a train of 90 TEUs. In DFC we will run a train of 400 TEUs. Today one train takes around 40 hours from here to Jawaharlal Nehru port (Mumbai). From Mundra and Pipavav it takes about 60-70 hours (to reach here). Once DFC comes up the trains from Mundra, Pipavav and JN port should be here within 24 hours. Many of the proposed 15 facilities will be on the DFC. Four of them are confirmed, others we are trying. We are looking for land; we are talking to state governments and different bodies. One facility has already come on a place called Kathuwas which is around 35 km short of Rewari (near Delhi). We are already operating the facility. Today it is into the current existing rail corridor. Once the DFC comes up it will not take us more than a week to link ourselves to DFC. This facility is already being planned with all the dimensions of DFC. Once the DFC connection comes, once the rail route is laid by companies given the contract by DFCCIL we will be able to link to it and add more connectivity. DFC might fully come by March 2017 but some patches of DFC will be available for increasing the existing line capacity and we will make use of that. Double stack trains are already running between Mundra, Pipavav and Ghatua terminal in a regular manner.
What kind of challenges the company has faced in the last few years?
One of the challenges we have faced is slow growth. The second big challenge is the export-import imbalance, imports have been higher and exports have been lower. As a result, a lot of times empty containers are required to be run which means logistics costs go up. Governance Now
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