| Rly container operators report fall in volumes | |
| COPING WITH the SLOWDOWN | | Bijith R / New Delhi November 21, 2008, 0:27 IST | |
State-owned as well as private railway container rake operators have seen their volumes drop 10 per cent in October, forcing some of them to weigh the option of keeping their rakes idle to reduce costs. There are about 15 private container companies which began operations over a year ago, thereby ending the monopoly of the state-owned Container Corporation of India (Concor).
Concor, which is the largest player in the container rail traffic with around 80 per cent market share, has seen a 7 per cent drop in the volume of TEU’s (twenty feet equivalent container) handled. This sharp drop comes after the company had reported over 3 per cent growth in volumes during the first half of the current financial year.
“The overall economic slowdown is affecting both our foreign as well as domestic cargo,” said Concor Managing Director Rakesh Mehrotra. The private operators have seen a 10-25 per cent drop in volumes. They expect the drop to worsen to 35-40 per cent in the next three months.
The sharp fall in the volume of container cargo is mainly on account of the slowing down of export orders from India’s largest trading partners like the United States and the European Union, following the global credit crisis. In fact, during the month of October, India’s merchandise exports dipped 15 per cent and slipped into negative territory for the first time in the last five years.
“Orders from the US, UK, China and Japan have come down drastically, which is forcing us to postpone the acquisition of six new rakes for another three to four months,” said a private container rake operator who has around 10 rakes currently.
Sankalp Shukla of InLogistics Ltd, which runs 12 rakes in the domestic circuit, said: “The slowdown has impacted those operators who have major presence in foreign trade.”
Some operators said that they might have to keep their rakes idle to keep costs down. A senior executive of a private container rake operator, which operates mainly between Delhi, Mumbai and Mundra, said: “This kind of drop in the volume of containers is not a normal one. If the situation worsens, some operators will have to keep their rakes idle.”
For running a container train between New Delhi and the Jawaharlal Nehru Port at Navi Mumbai, the daily cost comes in the range of Rs 13-15 lakh. “If the volume drops by 10 per cent, the cost of operation may go up by 15-20 per cent. So, if the container rake operator doesn’t get sufficient volume to cover his operational cost, then he has no other option but to keep the rakes idle,” he said.
However, the drop in the volume of container cargo traffic has not resulted in any significant decrease in the level of inventory pile-up at various inland container depots (ICDs).
“As a matter of fact, the inventory of containers at various ICDs has gone up. The clearance of imports has become sluggish due to liquidity problems being faced by importers. At the same time, the demand for empty containers for stuffing of export cargoes has come down due to the problems faced by exporters,” added Mehrotra.
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