The Hindu Business Line : Rlys cuts rates by 50% for moving rice in covered wagons

New Delhi, July 12 With an aim to capture the rice export traffic moved to Kandla and Mundra ports, by truckers on roads and by container trains, Railways has started a price war by slashing the tariff for moving rice by 50 per cent — provided rice is moved in covered wagons.

Traditionally, the Railways has not been getting the rice export cargo – it is transported either on roads or by containers on trains.

Now, faced with slowdown in loadings growth in the first quarter of this fiscal, Indian Railways has reduced rates by 50 per cent for moving rice in covered wagons from Delhi, Firozpur and Ambala divisions to stations in Gandhidham area leading to the Mundra port and Kandla port.

The new rates came into effect from July 11.

On the rail tracks, while containers are moved on flat wagons owned by container train operators like Concor, Gateway Distriparks, APL and JM Baxi; Indian Railways moves its goods in other types of wagons like covered and open.

Moving about 22-23 tonnes of rice in a container on trains from the Delhi region to ports of Kandla and Mundra in a twenty-foot equivalent unit (TEU) container costs about Rs 22,000-24,000.

With Railways slashing tariffs for rice transportation in covered wagons, the cost for moving about 23 tonnes of rice in covered wagons is now about Rs 12,000-13,000 for the same distance.

ISSUES

However, to move rice by trains, each rice exporter would have to book a train load that would require about 2,450 tonnes of rice. This is likely to be a hurdle for rice traders since they tend to move rice in smaller quantities regularly to save on inventory costs.

“We move about 8,000 tonnes of rice every month as break-bulk cargo to ports of Kandla and Mundra —all of which goes as smaller quantities on roads.

In containers, we move about 250-300 TEUs every month — but to various destinations across the country,” said an official of a Delhi-based rice exporting firm. Since a player loads 500-1,000 tonnes of rice on to vessels from the ports, it said accumulating 2,450 tonnes of rice may prove difficult.

On the impact of this slash on container trains, operators are keeping a close watch without reacting immediately.

“Railways may get some break bulk cargo from large rice exporters — which primarily moves by road. However, the rice moving in container trains is unlikely to be routed to the covered wagons. No exporter has yet approached us on this issue,” said an official from a container operating firm.