Business Daily from THE HINDU group of publications
Thursday, Jun 22, 2006
Business Daily from THE HINDU group of publications Thursday, Jun 22, 2006 |
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Logistics
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Supply Chain Management Tata Steel, Concor patch up differences over rates Santanu Sanyal
The `break-up' story Rlys hiking haulage charges on April 7 Concor passes the burden to its users. Tata Steel switches to road transportation.
Kolkata , June 21 Tata Steel and Container Corporation of India (Concor) have patched up their differences over rates. After a gap of nearly two months, Tata Steel, much to the relief of Concor, has again started utilising the Concor's services for transportation of its finished products mainly to southern destinations.
Resumes services
A rake comprising 62 boxes is currently being loaded at the Concor's Jamshedpur ICD for despatch to Chennai soon. It will be followed by more rakes. Before Tata Steel had stopped using the Concor's services, on an average five rakes, equivalent of 300 TEUs, were loaded every month with cold-rolled products at the Jamshedpur ICD, for transportation to Tondiarpet (Chennai) mainly, though in one month (July 2005) as many as 500 boxes were also loaded.
Reasons for `no'
Tata Steel stopped using Concor's services from around the middle of April, a few days after the Railways' April 7 announcement hiking the haulage charges. Concor just passed on the increased charges on to its users, including Tata Steel. The hike slapped an additional financial burden of about Rs 200 per tonne on the private sector steel giant which immediately reacted to it by totally boycotting Concor's services and switching over to road transportation. The reserve logistics in road transportation, it was claimed, had helped the company rationalise the transportation costs.
Change of heart
Tata Steel's change of heart took place after "a hard bargaining", according to Concor sources. "We've offered Tata Steel competitive rates", the sources point out without elaborating on what these rates are. "A compromise between pre-April 7 and post April 7 rates", the sources observe.
More reasons
There may be another reason. Tata Steel perhaps apprehends that the road transportation cost will not remain at the present level and will most certainly go up, sooner or later, in the wake of the soaring oil prices. Tata Steel's decision to resume support to Concor could not have come at a better time for Concor. Its eastern region operation of late has been at a low key, largely due to the seasonal factors.
Timely support
The jute goods traffic, a major component of the Concor's throughput in the region, has dropped in keeping with the trend every year during this time and is unlikely to pick up before August. Also, the secondary steel sector being in a not-too-happy situation, the cargo support from this sector too has dwindled. In fact some of the smaller steel units, whose support in past two months meant a lot to Concor, have stopped using the Concor's services.
More Stories on : Supply Chain Management | Steel | Tata Steel Ltd
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