Container Corp. of India cuts rates for Mundra cargo

Container Corp. of India cuts rates for Mundra cargo

Container Corporation of India is looking for ways to stimulate growth amid growing competition and lackluster demand.

In order to remain competitive with trucking companies, state-owned rail operator Container Corporation of India has slashed its tariff for the movement of containers from the Ludhiana Container Depot, a major northern hinterland point, to Mundra Port, the country’s biggest non-government cargo complex.

The announcement comes as Adani Ports-owned Mundra is frantically exploring ways to position itself to meet a doubling of its annual capacity to 6.6 million twenty-foot-equivalent units.

Hauling charges have been reduced to Rs. 37,500 (roughly $550) for a 40-foot container weighing up to 20 metric tonnes (22 tons), from Rs. 42,500 previously, Concor said in a notice to customers. For 40-foot boxes weighing more than 20 metric tons, the rate is now Rs. 49,000, compared with Rs. 52,500 before.

Concor said the discount plan is initially for six months, running up to May 2017, and a further extension would be considered dependent on trade response.

“Exporters in Ludhiana are facing tough times due to recession and rising input costs,” the company said.

Concor is India’s largest intermodal logistics provider and has a network of about 65 inland terminals nationwide. Amid lackluster demand and rising competition from private rail operators, Concor’s freight volumes, especially export and import traffic, have been under heavy pressure in recent months.

To draw truckloads to the rails, the company earlier this year lifted a 10 percent port congestion surcharge it began charging in November 2014 to compensate for the extra costs caused by congestion at major ports, particularly Jawaharlal Nehru Port Trust. The company also lowered its charges on select routes, including between Chennai and Bangalore. Additionally, it has introduced time-definite train services connecting Chennai to Delhi and Bangalore.

Despite those efforts, Concor’s volumes for fiscal year 2015 to 2016 fell 7 percent year-over-year to 2.9 million TEUs, with export-import cargo down to nearly 2.5 million TEUs from 2.6 million TEUs the prior year. Domestic cargo was down to 448,000 TEUs from 489,000 TEUs, according statistics collected by JOC.com.  

For Mundra, the rail freight rate cut is a major gain, as it largely relies on northern hinterland cargo for growth, and lower charges should help the private giant to poach additional cargo from JNPT. To handle more rail volumes, Mundra is in the process of adding three new automated rail-mounted gantry cranes at its container yards.