Logistics

Auto-carrier APL VASCOR expands fleet to 16 rakes

Our Bureau New Delhi | Updated on July 01, 2019

ICRA expects a ‘stable’ outlook for logistics

APL Logistics (APLL) VASCOR automotive, a company specialising in moving automobiles through rail wagons, announced it has expanded its fleet to 16 rakes.

“This indicates the willingness of automakers to adopt rail as a mode of transportation for moving cars,” said Umesh Bhanot, Managing Director, APLL VASCOR, in a release.

APLL VASCOR is a joint venture between APL Logistics, a Kintetsu World Express Group company, and VASCOR, which is backed by Fujitrans.

Each of the wagon in these rakes can hold up to 318 cars, or two wheelers and other vehicles. “The Indian Railways’ positive environment, with the implementation of GST, has created favourable conditions for the adoption of rail for long distance movement of vehicles,” stated Bill Villalon, President, APL Logistics and Chairman, APLL Vascor.

Freight rates to go up

Meanwhile, rating agency ICRA said that it expects the logistics sector growth to be stable in fiscal 2020, despite weak growth in the first quarter. The freight rates will go up in the remaining period of this fiscal, according to the agency.

“Although ICRA expects the growth to remain weak during the first quarter of 2020, given the sequential softening of freight rates and the subdued economic activity, it is expected to revive subsequently. We maintain a stable outlook for the Indian logistics industry, expecting it to grow at 8-10 per cent over the medium term.” said Sruthi Thomas, Senior Analyst, ICRA Ratings.

“From a robust aggregate year-on-year revenue growth of 19 per cent in third quarter fiscal 2019, the sample’s growth slowed down to 11 per cent during fourth quarter of 2019. The sequential slowdown in growth can be attributed to weaker freight availability as well as freight rates,” she added.

The sequential slowdown in demand has been especially pronounced in segments like automobiles, e-commerce and air express cargo. Fleet operators with significant dependence on the auto-carrier and infrastructure segments have witnessed relatively higher pressure recently.

With automotive production and dispatches slowing down, overcapacity in the system, and freight rates remaining subdued, fleet operators in the auto-carrier segment face challenges.

The slowdown in infrastructure projects on account of the moral code of conduct prior to the general elections also had an impact on the fleet operators catering to allied sectors, it added.

Published on July 01, 2019

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