Logistics

Amid pandemic disruptions, Maersk tapped rail to move containers over land

Our Bureau | Updated on: Jan 11, 2022
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For Indian import and export combined, the rail movement of cargo containers grew by 23 per cent, the Danish company said

Maersk said containerised export cargo moved by rail in India grew by 43 per cent in 2021 as the integrated logistics company owned by A P Moller-Maersk tapped more into rail to overcome the disruptions in the logistics ecosystem triggered by the pandemic.

For Indian import and export combined, the rail movement of cargo containers grew by 23 per cent, the Danish transport giant said.

The restrictions induced by the pandemic affected manufacturing as well as the movement of cargo.

“The supply chain came crumbling down with uncertainties for which there was no playbook to refer to,” said Vikash Agarwal, Managing Director, Maersk South Asia. “Demand and supply patterns shifted dramatically, further adding to the disruptions in the system,” he added.

Logistics service providers kept the wheels spinning for economies to stay on track as much as possible. Maersk had all its vessels sailing, warehouses functioning, and ports operating.

However, it was not smooth sailing as conditions remained foggy with wavering developments around the spread of the pandemic.One big challenge that Maersk faced during this period in India was moving cargo on landside – from manufacturers’ facilities to the port for exports or vice versa for imports.

“Truck drivers had returned to their hometowns, fearing the virus, and state border transport became a big hurdle with inconsistent rules being implemented across different states,” Agarwal said.

At the same time, in line with the goal of creating integrated solutions for customers that go end-to-end, teams within Maersk started focusing on understanding customer requirements and designing tailor-made solutions. “Increasingly moving cargo by rail instead of road was one such solution,” Agarwal said.

Unlocking the potential of rail to move cargo during the toughest time of the pandemic, benefitted Maersk’s customers in multiple ways: up to 30% quicker transit times as compared to road transport, unhindered connectivity between ports and manufacturing hubs and scheduled movements for better predictability, combined with a reduced carbon footprint.

As Maersk started developing customised solutions for customers rather than offering them off-the-shelf options, deeper insights into customers’ needs and challenges started unfolding.

Using this data, Maersk developed 13 new weekly dedicated rail services of which some were based on the ‘assured transit’ concept on the Dedicated Freight Corridors (DFC). These rail services were designed in such a way that different industrial verticals were to be connected to the ports. For instance, the ‘Automotive Express’ running between the Northern Capital Region’s (NCR) automotive manufacturing hub and the port of APM Terminals Pipavav, Gujarat or the ‘Retail Express’ that ran on DFC to give assured transit times to the lifestyle and apparels sector.

The benefits of dedicated solutions like ‘Retail Express’ were multi-fold – customers could reduce their inventory hold by almost 10% and be able to connect to the ocean transportation leg in time, saving them penalty costs too.

Rail solutions are expected to aid the rising demand for sectors such as e-commerce through dedicated services. E-commerce, which traditionally uses road transit, is expected to move towards rail even more as it gives assured transit for time-sensitive cargo.

Maersk plans to build on the foundation of the rail solutions in 2022.

“Rail has always been considered a second alternative to road transport despite being safer and faster. Last year, we created 273 new corridors with rail as the backbone and connected our customers on this highly efficient mode of logistics all the way to their hubs of convenience. Having carried more than 50,000 containers (twenty feet equivalent units) over and above the previous year and having covered 150,000 km, we are confident of building on this solution in the coming years too,” said Jyoti Mitter, Rail Product Manager, Maersk South Asia.

Published on January 11, 2022

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