New Delhi, December 15: Users of container services are likely to get some relief following the Railways Ministry decision to roll back the recent haulage charge hike partially. Container Corporation of India (Concor), the largest train operator in the country, which had passed the hike on to its customers, has now decided cut the charges for a two-and-a-half-month period. Concor has over 70 per cent market share. The Railways Ministry, which had decided to implement a 25-41 per cent rate hike from December 5, has now decided to lower the extent of hike by 33 per cent between December 15 and February 28, 2015. With effect from March 1, the entire rate hike will be implemented. We will roll back the hike by a corresponding proportion for the limited period, Concor CMD Anil Kumar Gupta said.
However, the container train operators association maintained that such flip flop is leading to confusion in the market as they usually have longer term agreements with their customers. Following the sharp hike by the Railways, we had passed on most of the hike to customers. But now, the Railways move of delaying some portion of the hike for less than three months has created an administrative problem as our tariff agreements with customers are usually through long-term contracts of at least for six months, said Sachin Bhanushali, CEO, Gateway Rail Freight Ltd. Bhanushali is also the General Secretary, Association of Container Train Operators (ACTO). Growth potential Also, the Railways relief for such a short period is likely to hit the demand for wagons. The container train operators (CTOs), who had started evaluating demand for about 15-20 train sets involving an investment of 250 crore, have kept their plans on hold as the growth potential for the sector appears bleak, said Bhanushali.
Additionally, the manner in which people were moving their cargo is getting changed. For instance, the movement of lightweight cargo such as tyres and yarn has already started shifting to container freight stations (CFS) closer to ports from the inland container depots (ICDs) in the countrys hinterland. Cargo movement has now shifted to road. We reckon about 15-20 per cent of cargo handling may tilt towards CFS near ports from ICDs, said Bhanushali. The only way forward is to have an independent regulator. Since 2007, when the concession agreement was signed with CTOs, the Railways has increased the haulage charges by 6-6.5 per cent a year on a compounded basis. Now in 18-20 months, there will be a 25-40 per cent increase. The Railways should rather keep the road freight rates in mind while fixing haulage charges for lighter containerised services, said Sharat Misra, President, ACTO.