Logistics

Concor now eyes handling cargo at Chennai airport

| | Updated on: Mar 30, 2015
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Plans up to eight private freight terminals in next 2 years

Container Corporation of India (Concor), the only listed company of Indian Railways, has diversified into handling bulk cargo through private freight terminals (PFTs) and handling cargo at airports. The company plans to have about six-eight PFTs over the next two years. After winning the bid for handling cargo at Mumbai airport, it has also evinced interest in handling cargo at Chennai airport, Anil Kumar Gupta, Concor’s Chairman and Managing Director, tells BusinessLine in interview. Excerpts from an interview:

What is the break-up of transportation and warehousing in your business?

Our reliance on rail freight is highest, around 78 per cent. With focus on private freight terminals, which would allow companies to handle bulk traffic, we hope this should come down to 65 per cent in about three years.

We cannot declare our existing facilities as PFTs as these are on rail land. Only the Durgapur and Nagalpalli facilities are PFTs. Now, 15 new facilities will come up as PFTs, which is our target for current five-year Plan.

Can you share the company’s new strategy?

We began with the prime objective of moving cargo from road to rail – in containerised form. Now our thrust is on expanding the scope of business from containerised transport to non-containerised transport.

PFT allows other than containers to be handled in private terminals, as Railways have a limited number of good sheds — about 4,000 odd--and they feel that freight handling capacity can go up, if private sector chips in with more terminals.

Our new facilities will be logistics parks with container depots (which Concor already has), but it will also have facilities to handle bulk railway cargo, except iron ore and coal, as defined in the policy.

Khatuas, another large facility, is already handling 60 trains a month. The customs is expected in three months. Of 300 acres, we have already developed 40 acres.

What is the trend in terms of weight required for container movement by rail?

For international containers, which use mechanised handling, the average weight is around 13-14 tonnes. In the domestic arena, only the heavy load comes to rail containers. The policy and rating is such that only if two truckloads of cargo are accommodated in one container does it become economical. In domestic containers, the average weight goes up to 22-24 tonne, or even 26 tonne.

What kind of cargo moves in the domestic segment?

We move rice, wheat, Kota stone, marble slabs, condiments and spices. In this segment, 65 per cent of cargo is primarily aggregation cargo, where the freight forwarders consolidate the cargo and offer it to us in container load.

We also get about 30-35 per cent of corporate cargo from large corporate customers from segments such as metal, fast moving consumer goods, tea and coffee. This cargo also comes to us through freight forwarders or road hauliers, who participate in reverse auction of these companies and offer cargo to us in the long distance segment. For instance, if they have secured contracts for 2,500 km lead, they can offer us cargo for 2,200 km. The average domestic lead for Concor is over 1,532 km, compared with the Railways

What about air cargo operations?

Earlier, Concor did miniscule air cargo operations. Three years ago, we bagged a contract from Mumbai International Airport Limited to handle domestic cargo. We had to float a separate company—Company Air Limited -- which took over the entire domestic air cargo operation in Mumbai. The current cargo handling at Mumbai, being done at two-three locations, will be taken to a single building, as per the deal. The building will be ready by June-July. Last year, we also bagged the international cargo handling. So, the entire air cargo handling at Mumbai will be done by us.

We are looking at expanding. We have shown interest at Chennai, which is being evaluated. We also handle some cargo at Goa airport and Nashik for Hindustan Aeronautics Ltd. This company is doing well and we got revenues of ₹228 crore in the first three quarters.

What is the company’s medium-term vision?

We want to continue holding 75 per cent market share, enhance our services by having at least 10 facilities along the dedicated rail freight corridor. Our current capacity is three million twenty feet equivalent units (TEU). By 2017, we want to increase capacity of over five million TEU.

What if completion of the freight corridor is delayed?

The corridor’s alignment is along the current network. Then, there is the Delhi-Mumbai Industrial Corridor, which will also have industrial conglomerates. Contracts have already been awarded for some sections in the dedicated freight corridor. Indications are that till the full corridor is set up, these facilities will be linked to the existing network. Once it becomes operational, within 48 hours the facility will be linked to the corridor’s network.

Published on January 24, 2018

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