Moving goods on container trains is set to get costlier. The Railway Ministry intends to increase rail freight charges for container train operators, multiple sources in the know told Business Line.
In March, the Railways had spared container operators, who escaped the across-the-board freight rate hike for all commodities.
The move will increase the cost of operations for players such as Container Corporation of India (Concor), Gateway Rail Freight, Arshiya Rail, APL Indialinx, Hind Terminals, Container Rail Road Services, Boxtrans and Inlogistics. Rail freight charges – also called haulage charges – account for over 60 per cent of operational costs for these operators.
Concor, with 74 per cent market share, is listed in Indian stock exchanges, while Gateway Rail and Arshiya Rail are subsidiaries of listed firms, Gateway Distriparks Ltd and Arshiya International. For the quarter-ended June, Concor registered a 6.5 per cent growth in export-import container handling.
Interestingly, the proposed hike comes after shipping lines such as APL, MSC and Evergreen recently decided to increase container transportation charges on various trade lanes connecting India.
Two container train operators are backed by the world’s top two shipping lines — APL Indialinx is backed by shipping major NOL, and Hind Terminals is backed by MSC Shipping.
The Railway Ministry had, with effect from from July 1, relaxed some norms for these operators – a move that will allow them to target movement of pig iron and sponge iron in the domestic market.
This will allow players such as Concor and Arshiya to load these commodities after almost one and half years, after the Railways had prohibited movement of heavy commodities in the domestic circuit. However, they need to work towards wooing back customers. For instance, Concor used to load about 18-20 rakes of pig and sponge iron in a month. After the rules were eased last month , it loaded seven rakes.
A Ministry source said, “For the last two years, there has been no increase in haulage charges for the container train operators”. However, container operators point out that the Railways had increased various surcharges.