Mumbai: Having lost its monopoly over the rail haulage of cargo containers, the state-run Container Corp. of India Ltd (Concor) is looking at entering the container shipping business to complete the integration of the logistics chain, a Concor senior official said.
“Ultimately, we will enter the container shipping business. It may not happen immediately. But that is our goal,” Mukul Jain, group general manager, planning and development, at Concor said.
With private players given rights to run container trains, there is a lot of competition for rail container traffic in India. “How do we ensure that our trains are full? If we have our own container port and container shipping line, then the entire logistics chain is with us,” Jain said, explaining the rationale behind his firm’s plan to enter the highly capital-intensive container shipping business, dominated by big global players such as Maersk Line, CMA CGM, APL Ltd, Mediterranean Shipping Co. SA and Hapag Lloyd, etc.
Thirteen private entities including Reliance Infrastructure Engineers Pvt. Ltd, Adani Logistics Ltd, Boxtrans Logistics (India) Services Pvt. Ltd, Gateway Rail Freight Pvt. Ltd, Hind Terminals Pvt. Ltd, MSC Agency (India) Pvt. Ltd, India Infrastructure & Logistics Pvt. Ltd (a subsidiary of APL) and Pipavav Railway Corp. Ltd, among others, have secured rights to run container trains after Parliament approved a proposal in 2005 to privatize rail freight services.
Concor, which is 63% owned by the government, has already made a foray into the container port business by taking a 26% stake in Gateway Terminals India Pvt. Ltd, which runs one of the three container handling terminals at India’s biggest container port, the Jawaharlal Nehru Port in Navi Mumbai. APM Terminals, the port operating division of the Danish shipping and oil conglomerate AP Moller-Maersk A/S, holds a 74% stake in Gateway, which began operations in 2006.
It also has a 15% stake in India Gateway Terminal Pvt. Ltd, which is developing the international container trans-shipment terminal at Vallarpadam in the Centre-owned Cochin port. The Dubai government-owned DP World, the world’s third largest container port operator, holds 80% stake in India Gateway Terminal.
Concor has also bid for developing a Rs2,000 crore greenfield port at Maroli in Gujarat. It has bid for the Maroli port project in a consortium that includes India’s largest shipping firm, the state-run Shipping Corp. of India and Hind Terminals Pvt. Ltd (a subsidiary of the Sharaf Group of the United Arab Emirates).
Shipping lines such as APL and Maersk and terminal operators such as DP World have entered the business of running container trains. “We are doing the opposite by entering the container shipping business,” Concor’s Jain said.
The firm will enter the shipping business only after gaining sufficient expertise in the container port business, he noted.
Jain said Concor also proposed to open offices abroad as part of the integration strategy. “This will also help us in capturing the cargo from the origin point itself,” he said.
In the 12 months till March, Concor moved 1.715 million twenty-foot equivalent units (TEU) from various Indian ports to inland destinations and back. A TEU is the standard size of a container and is a common measure of capacity in the container business.