APL, formerly known as American President Lines, the container transportation arm of Singapore-based transportation and logistics firm Neptune Orient Lines (NOL), will mark a re-entry into a business it had exited in the late 1990s when it flags off a container train from Loni in UP to Jawaharlal Nehru Port in Mumbai on Wednesday.
The service, branded APL IndiaLinx, is only the fourth licence holder to start operations after Parliament approved a proposal in 2005 to privatize rail freight services, which were hitherto the monopoly of the government-owned Container Corp. of India Ltd (Concor). Fourteen private operators have since won rights to run container trains to various ports.
APL holds a ‘Category 1’ licence that confers rights to run unlimited trains on all-India routes, for an initial period of 20 years, which is extendable by another 10 years.
Out of the three existing operators, only the joint venture between Hind Terminals Pvt. Ltd (a subsidiary of The Sharaf Group of UAE) and MSC Agency (India) Pvt. Ltd (the Indian arm of Geneva-based container shipping line Mediterranean Shipping Company) has a Category 1 licence.
The other two operators, Boxtrans Logistics (India) Services Pvt. Ltd , a subsidiary of Mumbai-based maritime logistics service provider JM Baxi & Co., and Innovative B2B Logistic Solutions Pvt. Ltd, an entity floated by Bagadiya Brothers (P) Ltd and Bothra Shipping, hold rights to connect ports other than JN Port.
APL was the first shipping company to start a dedicated train service with coordinated vessel and train schedules in 1979, linking port cities with the interiors of the US. In 1984, it developed the innovative stack-trains that allowed containers to be stacked one on top of another by re-designing the rail wagons. After buying APL in 1997, NOL sold off the stack-train business in 1999.
NOL, 68% owned by Singapore government-owned investment comany Temasek Holdings, is the largest shipping and transportation company listed on the Singapore Stock Exchange.
APL is buying seven rakes from Kolkata-based wagon maker Titagarh Industries Ltd. One rake comprises 45 wagons and each wagon is capable of carrying either one 40-foot equivalent unit (feu) or two 20-foot equivalent units (teu). A teu is the standard size of a container and a common measure of capacity in the container business.
APL is launching the service with one rake. A second rake will start service in June and the balance five by the end of the year that will connect Loni with Mundra Port and Ludhiana with JN Port.
Ships owned by APL regularly call at India’s premier container port-JN and the nearby Mundra Port to haul box cargo across the ocean to customers in Europe, the US and East Asia.
State-run Central Warehousing Corp (CWC) has a rail-linked ICD at Loni which is managed by a private firm. This is the only ICD that is now available for use to private operators till they set up their own facilities. Concor has exclusivity over other rail-linked ICDs in the country.
An ICD offers services for handling and temporary storage of import/export containers carried under Customs co-ntrol, with Customs and other agencies authorized to clear goods for home use, warehou-sing, temporary storage for onward transit and export.
The haulage charges of APL will be on par with Concor rates. The state-run firm charges about Rs28,000 for moving a teu box from North India to Mumbai and about Rs46,000 for an feu. But, the biggest value add for the customers will come from service offerings and efficiencies.
“Currently, it takes eight days from the time a box or container loaded with cargo leaves a factory gate in North India till the time it is put on a container ship sailing from JN Port. We will reduce it by two days,” said Kenneth Glenn, president, South Asia and managing director, APL (India) Pvt. Ltd.
APL India handled 1,20,000 teus during 2006. The company has tied up with a local firm to move boxes to and from the ports to inland locations. India Infrastructure and Logistics Pvt. Ltd, a joint venture between APL India and Hindustan Infrastructure Projects & Engineering Pvt. Ltd, a firm controlled by Rajeev Chandrasekhar, the former owner of mobile firm BPL, is investing about Rs350 crore to buy wagons and set up related infrastructure facilities. APL India has a 76% equity in the joint venture while Hindustan Infrastructure holds 24%.