CONCOR, NYK TO SET UP JV COMPANY

 

Container Corporation (Concor) signed a joint venture agreement with NYK Line India last Friday to set up a company that will provide rail-based car transportation services in the country. The 50:50 joint venture company will provide end-to-end car transportation services to automobile manufacturers, but will focus on rail-based transportation.

 

The Indian car transportation market is estimated at around 1.5 million units a year, according to Concor officials. The market is dominated by road-based transporters who provide end-to end service. Nippon Yusen Kabushiki Kaisha (NYK) of Japan is known internationally for its expertise in operating automobile terminals and its extensive fleet of Ro-Ro ships that offer regular sailings to and from the major ports.

 

Frames for containers

The joint venture company is keeping its options open with regard to the design of wagon that will be used to move automobiles. It is currently focusing on transporting cars in containers. We are designing a frame that can be fitted in a container to allow us to fit in the maximum number of cars, said a source. The company is likely to focus on the Delhi-Chennai sector initially.

 

We will target automobiles of Maruti-Suzuki and Hyundai in this sector, to start with, said the official.

 

The joint venture company will also foray into services for first-mile and last-mile connectivity for auto manufacturers, which will be road-based. Additionally, the company will provide value-added services, such as stockyard management.

 

This where NYKs technical expertise in areas such as storage, pre-dispatch inspection, accessories installation or customisation, repair and paint shop facilities will come in handy.

 

In India, NYK and Wallenius Wilhelmsen Logistics (WWL) of Norway have signed a memorandum of understanding with Mundra Port and Special Economic Zone (MPSEZ) to set up a world-class dedicated automobile terminal.

 

Patli-Mundra sector

At present, only Adani Logistics, the Adani Groups container train operating arm, transports cars in container trains between Patli (in Haryana) and Mundra port. The company uses special containers of South African firm Kar-trainer and fits in five small (Maruti Suzuki 800 model) cars in each 40-feet unit equivalent (feu) container. Each rake can carry 45 containers, thus allowing 225 cars to be transported in a rake. The cars are then exported from Mundra port to various European countries in NYKs vessels.

 

Last month (April), Adani Logistics moved 1,752 cars from Maruti Suzukis Gurgaon plant to Mundra port, a top company official said.

 

Earlier attempts

Concor has attempted to capture a share of the auto-transportation market earlier as well. In late 2005, Concor had signed a memorandum of understanding with NYK to carry out a feasibility study on the automobile transportation market.

 

Concor had subsequently tried introducing specially designed wagons to move cars. But the project did not take off because the haulage charges decided by the Indian Railways for moving the specially designed wagons were high and rendered the project financially unviable. Concor has a licence from the Indian Railways to offer container train services. So, in order move specially designed wagons, the company had to seek fresh haulage charges from the Railway Ministry.

 

Another company, the Pipavav Rail Corporation Ltd, in which the Indian Railways has a 50 per cent stake, had also designed and developed modified containers with lower height, along with special fitments to carry four cars per container. But that project did not move forward after the Railway Ministry declined to give some approvals.

 

Then, Shreyas Shipping started moving cars from the Delhi region to Kochi by a combined container train and coastal shipping service. Adani Logistics moved cars from Maruti Suzuki Indias Gurgaon manufacturing plant to Mundra port in its container trains. The cars were subsequently moved to Kochi using Shreyas Shipping Corporations coastal shipping service. However, the service was discontinued because of the lower costs offered by the road sector.