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Rail movement of containers to get costlier by 31% in 2 stages by nikhilndls on 18 November, 2012 - 08:00 AM
avatar nikhilndls Rail movement of containers to get costlier by 31% in 2 stages on 18 November, 2012 - 08:00 AM

Moving goods in container trains may get costlier.
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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.