Logistics

As slowdown bites, Concor plays around with rates to draw customers

P. Manoj MUMBAI | Updated on July 25, 2019 Published on July 25, 2019

June quarter likely to see an over 12 per cent drop in volumes

The Container Corporation of India Ltd (Concor) has extended the volume discount scheme for light weight cargo (up to 20 tonnes) in 40-foot containers booked from its inland container depot at Dadri near Delhi till December 31, 2019, as India’s biggest rail hauler of containers takes steps to deal with shrinking volumes on the back of a slowing economy.

The volume discount scheme for light weight cargo in 40-foot containers at ICD Dadri was introduced on January 1 this year for an initial period of six months, till June 30. Concor announced the extension of the scheme through a public notice on July 23. BusinessLine has reviewed a copy of the public notice.

In a separate July 19 trade notice, Concor said the handling charge for import containers at its flagship ICD at Tughlakabad will be collected from the respective consignees (importers) directly, at the time of preparation of gate pass from August 1. Currently, the charges are collected from the shipping lines.

Concor has also decided to suspend the additional surcharge (ASURE) at Tughlakhabad and Dadri ICDs for three months beginning August 1. ASURE is levied when containers are not returned to the ICDs within a month by the customers.

Industry sources said Concor’s volumes have dropped by at least 12 per cent during the first quarter of FY20 from a year ago, hit by sluggishness in the auto and other key sectors. The company will announce its June quarter results on July 31.

Concor is offering a volume discount of Rs 2,000 per forty-foot equivalent unit (FEU) to customers giving up to 50 FEUs a month, Rs 3,000 per FEU for up to 100 FEUs, Rs 4,000 per FEU for up to 150 FEUs and Rs 5,000 per FEU for more than 151 FEUs. It is applicable for 40 ft loaded export containers (up to 20 mt) for general commodities other than rice, sugar and reefer commodities booked from the Dadri ICD.

The scheme is only applicable to exporters, custom house agents and freight forwarders paying rail freight.

Concor said these decisions were taken to facilitate business, which industry sources said “were desperate measures to deal with desperate times”.

These measures come on top of its announcement in April to hold the prevailing rates (revised on April 1, 2019) for one year till March 2020, in a bid to attract more volumes by offering price stability to customers and to compete with road haulage of containers.

Concor, typically, revises rates twice a year to factor in a spike in diesel prices and haulage charges levied by the Indian Railways.

“It’s a competitive market. If Concor finds that customers are not comfortable in giving business, it can play around with the rates and schemes. Concor’s volumes have shrunk during the first quarter as a lot of industries are facing a slowdown, such as the auto sector, which imports in large numbers. If they face a slowdown, Concor will also be hit as it is only a facilitator. So, to attract and even retain customers, it is looking at these things,” an industry official said.

Published on July 25, 2019
This article is closed for comments.
Please Email the Editor