Double-stacks could be the game-changer

First double-stack container train run in India on March 23, 2006, between Jaipur and Pipavav Port in Gujarat (950 km).

Now double-stack box-trains can run from National Capital Region to Mundra and Pipavav Ports in Gujarat.

Route followed by trains from NCR is Ringus, Phulera, Ajmer, Palanpur, Samakhiali, Gandhidham, Mundra Port and Pipavav Port.

NCR-Mundra Port route operational for 19-foot-high double-stack trains (or hi-cube containers of 9'6”); train from Mundra to Pipapav can handle 17 feet height (or containers of 8'6”)

The move by the Indian Railways to enable double-stack container trains between Gujarat ports — Mundra and Pipavav — and the National Capital Region (NCR) is likely to create ripples in multiple segments of the container transportation market. First, the rail share of container transportation could increase in the Western port-Northern hinterland as double-stack container movement increases the rail container transport capacity.

Road vs rail

For the Railways, this sector is important as it accounts for over 60 per cent of rail-bound container exim cargo movement. On the same track length, with the same locomotive, each train can now move 180 containers instead of 90.

The increase in the supply of rail containers will only be limited by weight restrictions. The goods likely to be carried in these trains include cars, automobile and electrical components, consumer goods and pharma products.

Second, it would be interesting to watch whether Mundra and Pipavav port become more attractive for shippers compared to JN Port in Mumbai.

Already, Mundra and Pipavav have started wooing bigger ships and are capturing the rail container transport market share. One indication of this is Concor moving a higher share of its exim traffic to these ports and less to JN Port.

Concor, which is the largest container train operator with about two-thirds market share in terms of rolling stock ownership, will be affected. In 2010-11, Mundra handled 9.6 per cent of Concor's exim traffic, up from 6.9 per cent in 2009-10. On the other hand, JN Port handled 64.2 per cent of Concor's exim traffic in 2010-11, down from 74 per cent in the previous fiscal.

Double-stack container train movement to these two ports (Mundra and Pipavav) might speed up this process. With an eye on this potential, MPSEZ — the listed firm that owns and operates Mundra port — is already doubling the rail tracks inside Mundra Port.

Also, there will be further competition between Mundra and Pipavav — because the rail route to only Mundra Port can handle high cube containers, while that to Pipavav Port can handle double stack movement, but of slightly smaller size containers.

Another segment to track is the container train operations space, as well as the inland container depots (ICDs) located in NCR.

More box train players

As for the ICDs, the double-stack movement has started from two ICDs located in Gurgaon — such as Adani Group's Patli and Gateway Distripark's Garhi Harsaru. More players will vie to join this club.

“We are readying our ICD in Rewari for operations by December-January. It will be able to manage double-stack containers,” said Mr B.N. Shukla, MD, Kribhco Infrastructure, the logistics arm of Kribhco licensed to operate container train.

“About three-four ICDs in the NCR will be able to get the benefit of double-stack container trains, overcoming the constraints of overbridges and electric clearance,” Mr Shukla added.

Container train operators (CTOs), including Adani Logistics, Gateway Rail, Hind Terminal Pvt Ltd, Inlogistics, and India Infrastructure and Logistics, can reduce their unit cost of transportation. These CTOs are already using the Patli and Garhi Harsaru ICDs.

Interestingly, in the short run, demand for container wagons could come down because the same wagon can carry more containers unless there is a marked increase in overall traffic volumes.

Also, such externalities as the recent strike at Maruti Suzuki could just shrink cargo volumes!

Or what if disturbances in the Western world were to lower the overall exim trade?

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