Container Corporation of India Limited (CONCOR) commenced its operations in November 1989, taking over the existing network of seven inland container depots (ICDs) from Indian Railways (IR). At present, it has a network of 61 terminals. CONCOR’s infrastructure comprises over 16,877 container wagons, 39,374 containers, 14 gantry cranes and 108 reach stackers. While rail is the primary component of CONCOR’s transportation plan, the company has forayed into operating port terminals, setting up multimodal logistics parks, establishing cold chain and perishable cargo centres, managing distribution logistics, handling bulk cargo logistics, providing first-mile and last-mile logistic services and offering other value-added business solution services. At a recent Logistics Infrastructure conference, Sanjay Bajpai, executive director (strategic planning, distribution logistics and customs), CONCOR, shared his views on the container market in India, the major challenges, future plans and expectations from key stakeholders. Excerpts…
The Indian container market is expected to witness substantial growth in the coming years on account of the expansion of the industry, digitisation in container shipping, and rising demand for multimodal container logistics. Moreover, India’s GST collection has increased year on year by 12 per cent to over Rs 1.61 trillion in June 2023, which depicts the overall industrial growth of the country. GST enables the establishment of container train operators in proximity to industries.
The Indian container market size is anticipated to be valued at $10.3 billion by 2028 and is expected to grow at a compound annual growth rate of 1.7 per cent during the same period. IR has also set a target to handle 1,600 million tonnes (mt) of cargo by 2024-25. Additionally, it aims to decongest 51 per cent of the railway network by completing additional lines and implementing two dedicated freight corridors (DFCs).
PM Gati Shakti National Master Plan
In order to boost industry investment in the development of additional terminals for handling rail cargos, a new Gati Shakti Multi-Modal Cargo Terminal (GCT) policy was launched on December 15, 2021. The GCT is an integral part of the National Master Plan for infrastructure development, aimed at giving an impetus to 21st-century India and for accelerating growth in railway cargo traffic. The objective of this policy is to foster integrated planning and coordinated implementation of infrastructure connectivity projects involving relevant ministries, including roads and railways. To this end, the Ministry of Railways has envisaged the development of 100 cargo terminals during the next three years under the PM Gati Shakti Master Plan. Currently, the locations for GCTs are being identified/finalised based on industry demand and cargo traffic potential.
Challenges in container logistics
The imbalance in imports and exports results in a shortage of containers/empty haulage. There are frequent market fluctuations in the global export-import trade due to various geopolitical reasons and economic recessions in certain countries. Cybersecurity threats also pose a critical challenge due to the increased e-access facilities within the trade.
Another issue is the imposition of restrictions by various governments from time to time. The industry requires a three- to five-year policy visibility to anticipate changes. There is a lack of coordinated investments amongst various service providers in the logistics supply chain, leading to gaps. Furthermore, it is difficult to regulate shipping lines. During the container scarcity in India, During the container scarcity in India, CONCOR worked with shipping lines when problems were encountered in getting containers into the hinterland. As a result, CONCOR reduced its trade by 50 per cent and encouraged shipping lines to procure containers within the country, making them available for exporters. However, at present, there is a reverse issue. Shipping lines now have excess inventory due to increased imports. Thus, CONCOR is assisting the shipping lines in relocating their containers within the country. Another challenge is the transportation of lightweight cargo by train. To overcome this, CONCOR has introduced a 12-foot container unit that can accommodate larger volumes of bulk cargo at the same tariff as a normal container.
CONCOR’s future plans include building a network of about 20 nodes across the country, which will be known as mega distribution centres. These distribution centres will be connected by rail and provide a complete transportation solution. Further, it plans to expand services into hinterland locations and offer comprehensive logistics solutions to customers at their doorstep, resulting in the reduction of overall logistics costs.
Additionally, it will develop more multimodal logistics parks (MMLPs) across the country. Most of them will be developed along the DFCs, while the remaining will be constructed along industrial corridors. The development of MMLPs in proximity to the two DFCs would help in reducing transit times while increasing the turnround times for rakes. The increase in the movement of double-stack rakes will double the capacity for moving rakes between hinterlands and ports, ensuring faster and more voluminous movement, reduced dwell time, and cost savings.
Further, CONCOR is focusing on containerising bulk products such as cement, foodgrain’s and edible oils. It has started transporting cement in bulk, and container evacuation is being carried out in such a way that no pollution is generated.
Another plan is to increase the share of rail in containerised cargo movement. This would promote environment-friendly logistics operations and reduce the carbon footprint. CONCOR will continue to provide air cargo services as well. It is also increasing its role in providing first-mile and last-mile connectivity services through a system of vendors and auction procedures.
It has also taken the lead in IT initiatives, being the first to establish electronic data interchange connectivity with customs. CONCOR is now looking to establish direct connections with shipping lines. Another plan is to utilise artificial intelligence (AI) and machine learning at its terminals to provide enhanced services. In this regard, a pilot project is being carried out in Tughlakabad, Delhi. The introduction of AI in the container logistics industry will enhance the efficiency and accuracy in executing various tasks. Further, real-time status updates of containers will ensure continuous cargo visibility and improved product designs. CONCOR is also implementing various other initiatives to provide complete business solutions.
“CONCOR plans to expand services into the hinterland and offer comprehensive logistics solutions to customers at their doorstep.”
CONCOR is exploring the cold chain market in India for temperature-sensitive cargo, analysing the market-fitness of icebattery systems and planning market-penetration strategies by testing road and rail transportation of perishables and pharma from production sites to the market.
In order to strengthen and improve the service level, CONCOR has modified its bogie low container (BLC) wagons into bogie cow container modified (BLCM) rakes, with increasing the axle load capacity from 20.3T to 22T.
CONCOR has also initiated the acquisition of green fuel trucks to provide uninterrupted services to customers and reduce the carbon footprint. To start with, it has placed an order to procure 100 liquefied natural gas (LNG) trucks in the first phase.
Expectations from key stakeholders
Land acquisition costs: Due to the high cost of land, acquisition processes become time-consuming. Therefore, government intervention would expedite the land acquisition process. Further, there is a need to integrate logistics infrastructure with regional town planning.
- Customs notification for new ICDs: The time required for the notification of new ICDs should be reviewed, and the procedure should be further simplified.
- Limited capability of Indian manufacturers: The procurement of crucial infrastructure such as handling equipment, wagons and containers should be done effectively.
- Policy stability: Railway policies need to remain stable for a longer duration to ensure price stability for trade, providing a three- to five-year visibility to prevent disruptions.
- Competitive pricing policy for rail container movement: Given the environmentally friendly nature of containerised rail transportation, competitive railway pricing compared to road rates would increase the rail coefficient and enhance sustainability.
- Liberal policy for setting up new private freight terminals (PFTs): A liberalised policy for establishing new PFTs would encourage more PFTs to be set up at strategic industrial locations across the country.
“Railway policies need to remain stable for a longer duration to ensure price stability for trade, providing a three- to five-year visibility to prevent disruptions.”