Container train operators in India are taking a hit on their domestic traffic earnings after a 16-17 per cent increase in rail haulage charges were imposed by track-owners Indian Railways, reports The Hindu newspaper's Business Line.
Indian Railways imposes haulage charges on container train operators for allowing them to use the state-owned company's infrastructure such as tracks, signalling systems and locomotives, said the Chennai newspaper.
Indian Railways increased these charges by 15-16 per cent for containers over the 20-tonne category and for distances of over 1,000 kilometres from August 1.
"While we are able to pass on some level of hike in the export-import traffic segment; in the domestic segment we are facing significant resistance," said an official from the Association of Container Train Operators (ACTO).
"Domestic segment is taking traffic away from the road transporters. Most domestic transportation contracts have a one-year window with limited scope for cost escalation," he added.
This hike in the heavy-weight, long distance transportation category appears to have been driven by the Indian Railways' fear of losing its own traffic (which it carries in wagons) to the container train operators.
The domestic container train segment primarily serves heavy cargo such as sponge iron, pig iron, de-oiled cake, stone chips, soap stone, non-programmed, freight not moved under government programme, food grains and non-programmed fertiliser, etc. These are commodities that Indian Railways also loads and moves in its own railcars.
Indian Railways carries around 800 million tonnes of traffic annually, out of which 200 million tonnes can be containerised. All the container train operators together carry a domestic load of some 8.5 to 9.5 million tonnes annually, said the official.
"Some [Indian] Railways traffic does get diverted [to container operators]. But, if the Railways starts treating us as its competitors rather than associates, then we are in for difficult times," said an ACTO official.
ACTO has already taken up the issue with the Railway Ministry and has had three rounds of meetings. Apart from Container Corporation of India Ltd, companies that have started container trains include Gateway Distriparks through its subsidiary Gateway Rail, Innovative B2B Logistics, Boxtrans Logistics (subsidiary of JM Baxi Group), Hind Terminals, Adani Logistics, APL, CWC and ETA.
Indian Railways imposes haulage charges on container train operators for allowing them to use the state-owned company's infrastructure such as tracks, signalling systems and locomotives, said the Chennai newspaper.
Indian Railways increased these charges by 15-16 per cent for containers over the 20-tonne category and for distances of over 1,000 kilometres from August 1.
"While we are able to pass on some level of hike in the export-import traffic segment; in the domestic segment we are facing significant resistance," said an official from the Association of Container Train Operators (ACTO).
"Domestic segment is taking traffic away from the road transporters. Most domestic transportation contracts have a one-year window with limited scope for cost escalation," he added.
This hike in the heavy-weight, long distance transportation category appears to have been driven by the Indian Railways' fear of losing its own traffic (which it carries in wagons) to the container train operators.
The domestic container train segment primarily serves heavy cargo such as sponge iron, pig iron, de-oiled cake, stone chips, soap stone, non-programmed, freight not moved under government programme, food grains and non-programmed fertiliser, etc. These are commodities that Indian Railways also loads and moves in its own railcars.
Indian Railways carries around 800 million tonnes of traffic annually, out of which 200 million tonnes can be containerised. All the container train operators together carry a domestic load of some 8.5 to 9.5 million tonnes annually, said the official.
"Some [Indian] Railways traffic does get diverted [to container operators]. But, if the Railways starts treating us as its competitors rather than associates, then we are in for difficult times," said an ACTO official.
ACTO has already taken up the issue with the Railway Ministry and has had three rounds of meetings. Apart from Container Corporation of India Ltd, companies that have started container trains include Gateway Distriparks through its subsidiary Gateway Rail, Innovative B2B Logistics, Boxtrans Logistics (subsidiary of JM Baxi Group), Hind Terminals, Adani Logistics, APL, CWC and ETA.