Logistics

Wagon-makers hit as container train firms share rakes to manage excess capacity

Mamuni Das New Delhi | Updated on March 12, 2018 Published on February 21, 2012

A file photo of containers being loding in a goods wagons.





Wagon makers such as Texmaco, Titagarh Wagons and HEI are facing the brunt of a year old Railway Ministry policy that limited the growth of container train operators (CTOs).

Ever since the Indian Railways announced the policy in December 2010, that pretty much prohibited certain categories of cargo for domestic container operations, no new orders for flat wagons have been placed by the CTOs.

Many CTOs that Business Line spoke to confirmed this.

In the one last year, the 16 CTOs including Concor, Gateway Rail have only received deliveries of those wagons, for which orders had been placed before December 2010.

A key indicator is the number of rakes inducted by Container Corporation of India (Concor) - the largest player in the CTO market.

Till the first nine months of current fiscal, Concor had inducted only one rake, against 12 in 2010-11 and 16 in 2009-10.

“There was a set-back in order flow from private container train operators as their business suffered a setback following a hefty increase in haulage charges by Indian Railways,” Texmaco, a large wagon manufacturer, had noted in mid-2011.

For wagon makers in India, Indian Railways is the main customer and accounts for large share of their business. Since 2007, when Railways opened up container train operations, private CTOs had offered incremental business to wagon maker.

For instance, in last five years, wagons bought by new players now account for one-third of total container wagons in the country. The Railways policy impacted the growth prospects particularly in the domestic segment for many players.

BUSINESS HIT

For the April-January period in current fiscal, the loading in domestic container train segment has dipped by 9.5 per cent.

Since then, players that operated in both export-import and domestic segment - such as Concor and GDL - have increased focus on export-import traffic. Additionally, the growth in export-import segment has been erratic and not enough to absorb the excess capacity in the market.

The drop in domestic business has prompted some of the entrant firms, with greater focus on this segment to offer their wagons to competitors on lease.

WAGON SHARING

This has led to higher level of leasing of rolling stock among CTOs.

The operators with higher focus on domestic segment include Arshiya Rail, BoxTrans, Delhi Assam Roadways, Inlogistics and Kribhco Infrastructure.

In fact, now, some the CTOs are also offering their wagons on sale. Gateway Rail Freight Ltd, a subsidiary of listed firm Gateway Distriparks, has said that in the next fiscal it could consider buying rakes from the other players.

> mamuni@thehindu.co.in

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Published on February 21, 2012
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