Concor hikes rail tariffs

Freight costs on shipments from India will go up substantially effective Oct. 1 following a tariff increase decision by state-owned rail operator Container Corporation of India.

The planned hike follows a steep upward revision of container haulage charges, ranging from 150 to 200 percent, announced by Indian Railways, also effective Oct. 1.

“Indian Railways have revised rail-haulage charges on containerized movement of select bulk commodities, and accordingly, rail freight tariffs for export-import traffic are being revised,” Concor said.

Haulage charge is the fee paid by container train operators to Indian Railways for using its rail network and infrastructure. Such costs account for up to 75 percent of a typical container-hauling company’s total operating expenses.

In addition, publicly-owned Railways also barred movement of heavy commodities in double-stack containers.

The Railway Ministry’s move is apparently aimed at discouraging container rail operators from carrying bulk commodities in boxes, a strategic shift which has gained momentum in recent years with the entry of new private operators coupled with cost advantage vis-à-vis roadways and ease of handling.

Bulk traffic has been the mainstay of Railways’ freight transportation business, which generated revenue of $5.3 billion in the April-August period compared with $5 billion a year earlier.

Concor, an offshoot of Railways, is the largest intermodal logistics provider in the country, with a network of nearly 60 inland depots. The company’s haulage fee disbursements for the full fiscal year ended March 31 amounted to $483 million, representing almost 60 percent of its total sales during the year.

Rail operators, under the aegis of the Association of Container Trains Operators, expressed deep concern at the planned increase in haulage charges as well as restrictions on double-stack container movements by Railways, and plan to approach the ministry for a review of its decision.

In other trade news, the Commerce Ministry said the country’s exports in August surged 22.5 percent from a year earlier to $16.64 billion, while imports increased 33 percent to $29.7 billion. Total exports for the April-August period were estimated at $85.27 billion, up 29 percent on a year-on-year basis.
(Source:www.joc.com)