Container rail cos fret as haulage charges set to rise

Fri, Jul 4 09:07 PM

MUMBAI (Reuters) - The Indian Railways have announced an increase in haulage charges for containerised cargo in privately-owned wagons from August, a move which will force container rail operators to raise prices, the companies said.

According to a railway circular issued on Tuesday, the freight rate will go up 14-16 percent from August 1 for a distance of 1,000 kilometres and beyond and for weight categories of 20 tonnes and beyond per twenty-foot-equivalent units (TEU).

Gateway Distriparks Ltd, Sical Logistics Ltd, Boxtrans Logistics (India) Services Pvt Ltd and state-run Container Corp of India Ltd (CONCOR) are some of the companies running container cargo services in India.

The rate increase is also applicable to CONCOR, the circular said.

"We will definitely increase the rates because we cannot afford it," Prem Kishan Gupta, deputy chairman and managing director of Gateway Distriparks said on Friday.

"Interest rates have gone up and other costs have gone up so it has to be passed on to the customer, if it becomes applicable," he said.

The Indian Railways charges a haulage fee from container train operators to haul trains over India's rail system. The Indian Railway provides the locomotive, crew and passage on its system.

"If the railway increases their rates, private operators will also increase the rates," said Sudhir Rangnekar, managing director of Sical.

A CONCOR spokesman did not offer any immediate comment.

In India only about 50-55 percent of domestic cargo suitable to be transported by containers makes it way to container operators compared with 80-85 percent in developed countries, leaving much scope for growth, said Rangnekar.

The price increase may dampen growth rates but overall volumes will still rise as road transport costs are inreasing, he said.

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