Logistics

Concor carries out internal restructuring to stay fit, profitable

P Manoj Mumbai | Updated on August 05, 2020 Published on August 05, 2020

Concor’s two new wings are expected to ensure faster decision making and better utilisation of assets and facilities   -  PTI

Rail hauler compresses 8 regions into 4, creates exclusive wings

State-run Container Corporation of India Ltd (Concor) has carried out an internal restructuring which involved compressing eight regions into four and creating two exclusive wings dedicated to warehousing and first and last mile connectivity as part of a strategy to rationalise operations, better utilise human resources, cut costs and boost revenue.

The rail hauler is also building a mobile application that will facilitate customers to tie-up first and last-mile connectivity directly with transporters at market rates, emulating ride hailing apps such as Uber and Ola.

The four regions – Northern, Southern, Eastern and Western, the two wings tasked with warehousing and first and last-mile connectivity and the mobile application, each will be looked after by an official of the rank of executive director at the corporate head office, a company official said.

Privatisation bound Concor earlier had eight regions – Northern, Southern, Eastern, Western, Central, North Central, South Central and North Western.

The terminals under the Central, North Central, South Central and North Western regions have been distributed among the Northern, Southern, Eastern and Western regions.

The restructuring follows a Railways Ministry decision to revise the calculation of land licence fee it levies from Concor from April 1 this year, a move that will jack-up the firm’s annual land license fee pay-out to about ₹450 crore from about ₹140 crore. The move also forced Concor to surrender 16 terminals to the Indian Railways.

The land licence fee is paid by the Navratna PSU for running terminals built on land leased from Indian Railways.

“The top management feels that out of the box thinking is needed to run the business in a changed scenario. The exclusive wings on warehousing and first and last mile connectivity is a step in that direction. We are looking out for areas where we should go aggressively for augmenting revenue,” the official said.

The two new wings are expected to ensure faster decision making and better utilisation of assets and facilities.

“Warehousing is in demand after the introduction of the Goods and Services Tax. Faster clearance of goods has become an issue following the spread of coronavirus. The management feels we should give more focus to warehousing,” he said.

Last-mile connectivity

Under the first and last mile connectivity plan, Concor will provide door pick-up and door delivery of cargo to customers. It will pick up cargo from the door-step of the customer, get the cargo Customs cleared, load it on wagons and take it to the port for exports and vice versa.

The mobile application will allow Concor’s customers and service providers/transporters to finalise first and last mile shipments on market rates.

So far, Concor hired transporters on long-term contracts ranging from 2-3 years at fixed rates finalised through tenders, irrespective of whether the market is up or down.

“But, when the market is low and the transporter is not willing to give the lower rate to Concor, the business is lost,” the official said.

With the mobile application, customers will get the benefit of dynamic pricing based on market conditions quoted by the transporters. “It will help customers get the lowest rates,” the official said, adding that Concor will set minimal criteria for registration of transporters.

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Published on August 05, 2020
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