How smaller containers could mean big business for Indian Railways

Start-ups floated by former railway employees are attracting more customers towards the railways by designing alternative types of containers.

A firm founded by Naresh Kumar – Kalyani Cast Tech - has designed containers that help to provide services on the rail mode on an end-to-end basis. Kumar claims that the services are at least 10 per cent cheaper than the roads for lighter cargo.

His former colleagues from the Indian Railways - Rajnish Kumar, Amit Kumar and Durgesh Govil – have founded a container train operating firm Pristine Logistics, which has been running these boxes on a small stretch of Indian Railways between Jamnagar and Ludhiana. Kumar now hopes to run the trains on newer stretches.

Adjusting railway routes to ensure that they can run double stack containers of smaller size can mean big business for railways, according to Kumar. Smaller-sized containers – stacked one atop the other -- innovated by Kumar have been successfully chugging between Jamnagar and Ludhiana/Rewari for last 15 months. These containers are moved by Pristine Logistics.

He stressed on the “end-to-end” pricing as the cost of moving goods usually tends to increase after taking into account the last mile handling on roads. Kumar believed that the railway sector can wean away lighter traffic that moves in containers from the road sector if the Indian Railways were to use these containers across all the railway routes.

Challenges

The lack of sufficient air space - both vertically and horizontally - prevents the movement of the such double stack containers across the Indian Railways.

Indian Railways’ traditional network has foot-overbridges, roofs above platform, among others. These previously built infrastructure could get damaged if these containers, that stacked one above the other, are allowed to move.

That said, newer railway routes are opening up for dwarf containers, the container train operator which has been using such “dwarf containers”. The new routes, the which Indian Railways will open up soon, are Jamanagar-Vasai, Jamnagar-Hyderabad and Ludhiana-Mumbai-Hyderabad, expected Kumar.

Kumar has studied and arrived at a list of multiple Indian Railway routes that can be cleared for movement of such double-decker container trains. These studied rail routes will connect – Delhi/NCR with various destinations like Chennai, Benagaluru, Pune, JN Port near

Mumbai and Siliguri; and Punjab/Haryana with Mumbai in the West, South and East sector.

These routes move 70 per cent of India’s container cargo, estimated Kumar based on a study. But an investment of “below Rs 1 crore” is required to make available the requisite air space on these rail routes so that the trains lugging the double decker containers chug through smoothly without harming any of the Indian Railways’ infrastructure like the over-bridges, wires, among others.

Kumar said the latest version of dwarf containers designed and made by him are at an advantageous position compared to similar containers made by other Indian and Chinese firms because the KCT containers provide cargo of much higher volume and can accommodate extra load as well.

A lot of traffic on these routes – such are FMCG, fruits and vegetables, chemicals, garments, automobiles and polymers – move on the roads. Kumar expects cargo to shift from trucks on road to rail mode by use of the containers designed and made by KCT.

Moving their cargo on the railway tracks by using these containers instead of trucks could help customers avoid multiple handling, theft and dealing in cash, said Kumar. Newer and wider roads, which allow loading of heavier cargo now, are providing much stiffer competition to the Railways.

Client list

As for customers, RIL (Reliance Industries Limited) has been moving cargo using such containers on Pristine Logistics for over a year now. These can also be used for foodgrain movement for Central Warehousing Corporation, according to studies.

These wagons can also be used to move vehicles -- four-wheelers and two-wheelers – at much cheaper logistics costs in the trains. KCT has also been in talks with road sector players to proliferate usage of its dwarf containers alongwith smaller containers on road.

Kumar is optimistic about the investment that these containers will generate. As customers look out for ways to slash logistics costs, there is bound to be additional investment in these containers and wagons over the next few years. Economic growth coupled with traffic weaned away from roads can potentially generate some 100 million tonne extra cargo. To move such volumes of cargo - investments will be needed in over a million containers (about Rs 7500 crore) and wagons (another Rs 7500 crore). These investments, Kumar reckons, can generate a revenue of Rs 15,000-18,000 crore every year for the Indian Railways, said Kumar.

In fact, he has also designed smaller-sized boxes, into which smaller chunks of cargo – of less than truck load -- can fit in. Such smaller standardised boxes can also fit into the dwarf containers and help the Indian Railways attract lighter, high value cargo, parcel cargo onto its fold.

Kumar hoped that someday these containers will become the standard – or most used containers in India, and may be beyond India as well.

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