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Will customers have to pay more?

The steep hike in haulage charges has hit private container train operators including the Container Corporation of India and those who are engaged in the domestic movement. The domestic operators generally concentrate on heavy traffic, like steel items, as the margin in the transportation of these items is handsome. The rush among domestic operators to Rourkela, Raigad and Raipur to cash in on the burgeoning production of the sponge iron units located in that region is a c ase in point. In fact, the margin they have on heavyweight cargo would often help them cross-subsidise the transportation of the light-weight cargo. The recent hike in haulage charge has been steepest, as much as 16 per cent, for the heavyweight cargo. Which means, the margin of the domestic operators will now be squeezed, more so when their appeal for rollback of the increase has gone unheeded so far. Will they pass on the entire burden to the customers? Unlikely. Despite diesel price hike, there has not been any significant rise in road freight, particularly on the trunk routes, though there have been small increases, an estimated 7-8 per cent, on the shorter routes.

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