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Mamuni Das

For moving ready-made garments in forty-foot equivalent unit (FEU) containers from factories in the northern hinterland of Delhi/Gurgaon/Panipat to ports in Mumbai, exporters prefer road transporters as the corresponding rail transportation cost is about 14 per cent higher. The door-to-door road transport cost is about Rs 42,000, while for the rail route, it is in Rs 49,000 range. Each FEU is twice the size of the standard container size of twenty-foot equivalent unit (TEU).

Similarly, for transporting electronic goods in FEU containers from their factories in Noida (Delhi’s satellite town) to ports in Mumbai, consumer electronics players find the road transportation rates about 26-27 per cent cheaper than the corresponding rates offered by container train operators.

With the hope of diverting such FEU containers (which carry voluminous, light-weight commodities) from the roads to the railway network, container train operators have sought a reduction in haulage charges for FEU size containers from the Indian Railways.

Rail haulage charge is a key operating cost for container operators — they have to pay haulage charges to the Railways every time they transport containers using the Railways’ infrastructure, such as locomotives, tracks and signalling systems.

For a container train operator, rail haulage accounts for 65 per cent of the total door-to-door transportation cost, while the rest (35 per cent) goes towards truck charges for moving boxes from customers’ factories to inland container depot (ICD), ICD handling charges and port handling charges.

For FEUs, the Railways currently charges 1.8 times the haulage rates levied for TEUs. Indian Railways, which has traditionally fixed FEU haulage rates at twice the prevailing level for TEUs, had fixed the current charges a few months ago, following demands from container train operators. However, these charges are only valid up to March 31.

In this backdrop, the Association of Container Train Operators (ACTO) has demanded that the Railways should fix the haulage charges for FEU containers at 1.6 times of the corresponding rates for TEUs.

Though TEUs have traditionally been the standard unit size for containers, the export-import (Exim) trade segment has seen an increase in the share of the large-sized FEU containers over the past few years.

Of the total containers used in India’s Exim trade, over 60 per cent are FEUs, said an official from a container train operating firm. And of those FEUs, about 50 per cent of the containers that move lighter goods (like ready-made garments, handicrafts and auto parts) have a gross weight of below 20 tonnes. “The road transporters attract these lighter-weight FEU containers, with lower freight charges,” an official from a container train company said, adding that in order to divert this traffic from roads to Railways, the haulage charges have to be further lowered.

Overall, the Exim container segment in trains has witnessed an impressive 30 per cent growth rate in the first eleven months in 2007-08 fiscal against the corresponding period of 2006-07. Between April 1, 2007 and February 29, 2008, the Railways registered a 30 per cent increase in Exim earnings year-on-year — it received Rs 1,377.85 crore from container operators as haulage charges.

The total container traffic handled by major ports in India during the first eleven months in 2007-08 was at 6,077 TEUs, 22 per cent higher than the corresponding period in 2006-07.

In terms of tonnage in containers, the ports handled 83 million tonnes of traffic in containers — of which just about 20 per cent (at 17.2 million tonne) of the total Exim container traffic was transported through rail network during Apr-Feb 2007-08.

Fifteen container operators, including the incumbent Container Corporation of India (Concor), have signed agreements with Indian Railways for offering container train services.

The entrants are: Adani Logistics Ltd/Mundra Port & Economic Zone Ltd; Boxtrans Logistics India Services; Central Warehousing Corporation; Container Rail Road Services; Delhi Assam Roadways Corporation; Emirates Trading Agency; Gateway Rail Freight; Hind Terminals; India Infrastructure and Leasing; Innovative B2B Logistics Solutions; Pipavav Railway Corporation; Reliance Infrastructure Engineering; SICAL Logistics and Kribhco.

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