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A file picture of container boxes being loaded at Concor’s container freight station

Mamuni Das

New Delhi, Aug. 22 Container train operators are taking a hit on their domestic traffic segment following the 16-17 per cent increase in rail haulage charges imposed by Indian Railways since August 1.

The Railways imposes haulage charges on container train operators for allowing them to use Railways infrastructure such as tracks, signalling systems and locomotives. Railways increased these charges by about 15-16 per cent for containers over the 20-tonne category and for distances of over 1,000 kilometres.

“While we are able to pass on some level of hike in the export-import traffic segment; in the domestic segment we are facing significant resistance,” said an official from the Association of Container Train Operators (ACTO).

“Domestic segment is a new segment that we are building up by taking traffic away from the road transporters. Most domestic transportation contracts have a one-year window with limited scope for cost escalation,” he added.

This hike in the heavy-weight, long distance transportation category appears to have been driven by the Indian Railways’ fears of losing its own traffic (which it carries in wagons) to the container train operators.

The domestic container train segment primarily serves heavy cargo such as sponge iron, pig iron, de-oiled cake, stone chips, soap stone, non-programmed (those not moved under any Government supported programme) foodgrains and non-programmed fertiliser, etc. — these are commodities which Railways also loads and moves in its wagons.

However, for loading these commodities in Railway rakes, large volumes of goods are required. Customers need to have about 2,500 tonnes of commodity for covered wagon rakes and 3,500 tonnes of the commodity for open wagon rakes. Container train operators, meanwhile, load 200-500 tonnes of a different mix of goods in a rake.

Thus, container train operators rue that the Railways’ move of increasing haulage charges is making container rail traffic disadvantageous vis-À-vis road traffic.

Railways carries around 800 million tonnes of traffic annually, out of which 200 million tonnes can be containerised. All the container train operators together carry a domestic load of some 8.5 to 9.5 million tonnes annually, said the official.

“Some Railway traffic does get diverted (to container operators). But, if the Railways starts treating us as its competitors rather than associates, then we are in for difficult times,” said an ACTO official.

ACTO has already taken up the issue with the Railway Ministry and has had three rounds of meetings. Apart from Container Corporation of India Ltd, companies that have started container trains include Gateway Distriparks through its subsidiary Gateway Rail, Innovative B2B Logistics, Boxtrans Logistics (subsidiary of JM Baxi Group), Hind Terminals, Adani Logistics, APL, CWC and ETA.

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