Concor will expand coastal shipping service to Bangladesh, says CMD

Container Corporation of India (Concor) will open 20 distribution logistics centres with a combined warehousing space of about 50 million square feet in five years and expand its recently started coastal shipping service to cover India’s east coast and also Bangladesh, its Chairman and Managing Director V Kalyana Rama said.

State-run Concor flagged off its coastal shipping service in January linking Deendayal Port Trust in Kandla with V O Chidambaranar Port Trust in Tuticorin with stops at New Mangalore Port Trust and Cochin Port Trust by a weekly call deploying two 700-TEU capacity ships.

The Navratna PSU opened its first distribution logistics centre in Chennai on March 31.

“We have completed just 10 voyages since staring the coastal shipping service in January, but we are already having more than 80 per cent occupancy. Very soon, the two 700-TEU capacity ships will run full. We will expand our service into the east coast and connect Bangladesh as well,” Kalyana Rama told BusinessLine .

Earlier this year, the Central Board of Indirect Taxes and Customs (CBIC) permitted Indian-flag vessels to make calls en-route at Sri Lankan and Bangladeshi ports during their export-import (EXIM) and domestic services. The move will help fleet owners make optimum use of their space, cut transportation costs and boost modal shift of cargo from road and rail to sea.

Discount scheme

Kalyana Rama said Concor has decided to extend the volume discount scheme offered to shipping lines to five years, from the existing one year, and will count the volumes offered by the lines for coastal shipping for the purpose of working out the volume discount.

“We are ready to extend the volume discount agreement for five years so that every year we need not keep negotiating with the shipping lines. It will also help build a stable relationship between the two parties to grow business. Besides, the loaded volumes given by shipping lines will be counted for the purpose of volume discount which we are now giving on an annual basis. So, along with the rail volumes given by shipping lines, the coastal shipping volumes will also be taken for counting volume discount. It will be beneficial for the lines to give us transhipment containers as the highest discount offered under the volume discount scheme is 3.5 per cent of gross freight which is a big margin in logistics. This is an incentive we would like to offer to shipping lines,” Kalyana Rama said.

“The volume discount is only for export-import (EXIM) transhipment containers not on coastal domestic containers. It is for EXIM containers which will be unloaded from mother vessels at some ports and have to be transhipped to smaller ports. If there are more volumes, we don’t mind calling at other ports en-route our service; these things can be planned,” he said.

Concor has identified 20 locations for setting up distribution logistics centres — a vertical integration of its core business.

“We will be developing around 50 million sq ft of warehousing in 4-5 years at these distribution logistics centres which will be structured on a public-private-partnership model for 30 years, wherein the business partner come and work with us. The asset is his, the entire operations will be looked after by them and we are providing the complete marketing and all other support including on service levels, planning etc,” he said.

For its first distribution logistics centre in Chennai, Concor has teamed up with D P World to exclusively use its three facilities that were originally developed by the NDR Group and was acquired by the Dubai-based firm last year.

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