Rail freight rates for containers cut

Container Corporation of India (Concor) has reduced freight rates for containers following a reduction in haulage rates by Indian Railways in certain segments.

A railway ministry statement said it has decided to rationalise haulage charges for containers transported by rail in privately owned wagons, adding that it expects the reduction in haulage charges to catalyse rail borne container traffic at a time when growth, both globally and domestically, is stunted. 

Concor, the largest container train operator in the country, which accounts for over 70 per cent of the market, said it will reduce tariffs following the Railway's move.

The revised tariff structure, which takes effect from 1 April 2013, will also benefit the growing fleet of 40 feet containers in the exim traffic.

The reduction in the haulage rates of 10 to 20 tonne loaded containers will be 5 per cent.

Additionally, the Railways has reintroduced the linkage of haulage rates of empty containers and flats to the haulage rates for 20 feet containers (single deck) in the 0-20 tonne weight slab at 65 per cent and 60 per cent, respectively.

Haulage rate accounts for about 70 per cent of the operating cost of container train operators. This will result in the reduction in haulage rates of empty containers and empty flats by 13 per cent in each case.

The move will also help other container operators such as Gateway Distriparks, APL India Infrastrcuture and Hind Terminals.

There is no change in the haulage rates in the case of loaded containers in weight slabs of up to 10 tonnes, 20 tonnes and 26 tonnes and more than 26 tonnes.

Railways expects the reduction in haulage rates to help container train operators (CTOs) in augmenting their competitive edge and consequently increase traffic volumes to mutual benefit of the CTOs as the Railways.

Haulage rate is what the Railways charges container train operators for moving their container wagons on the railway network and the Railway's move will make movement of containers cheaper.

The Railways, meanwhile, has allowed a 25 per cent concession in the haulage rate for containerised fruits and vegetables traffic sponsored by the ministry of agriculture and /or the National Horticulture Board from 15 March 2013 to 14 March 2014.

In another move, the Railways has decided to permit felspar (feldspar), which is a mineral, to be transported in containers as a specific exception. This permission, which has come into effect from 19 March 2013, is expected to further spur growth in rail borne container traffic.

The move is important as the association of container train operators had represented to the Railway Ministry after the Ministry, in November 2012, had decided to increase the haulage rates by up to 31 per cent in two steps.