Domestic Facilities & Service
The modal split between rail and road has shifted from 80:20 in 1950-51 to 40:60 in 1997-98. Substantial 'small volume' transit-sensitive' general goods traffic that typically needed to be consolidated went over to road because of several perceived advantages. 'Client-focussed' customized services are the backbone of this segment. Each service will have to be tailor-made to suit the specific requirements of the client concerned. Large companies with substantial movement requirements shall be the ones in focus.
The advantages of rail for long and heavy hauls are clear. By contrast, the road situation today is marked by poor maintenance, congestion and delays (38% of travel-times spent waiting at check posts). Given a choice, the shipper is willing for a modal shift, if one can guarantee speed, safety and ensure reliability.
Indian Railway's strategic initiative to containerize cargo transport put India on the multi-modal map for the first time when the Indian Railways entered the market for moving door-to-door domestic cargo in special Indian Railway Specification (IRS) containers starting in 1966.
Though CONCOR, was incorporated in March 1988, it embarked on the transportation of domestic cargo only in 1991, using ISO standard containers for the job. Between 1993 and 1996, there was a major thrust in the domestic business, so much so that domestic business represented almost half of CONCOR's total business in 1995-96. This business, however was dependent on large scale chassis-to-chassis movement of cement, which had come CONCOR's way due to shortage of conventional rail wagons.
By 1997, it became clear that while there was a vast potential of domestic traffic to be tapped, this could only be done by focussing the strategy on the movement of goods that were erstwhile moving on road, and not on bulk, rail based traffic. A separate Domestic Division was therefore created in December 1997.
The objective of the division is to bring back to rail, goods which are now being transported by road. The division aims to do this by containerizing piecemeal cargo and offering a comprehensive door to door intermodal service.
The domestic division functions through a network of terminal/hubs. There are at present 5 exclusively domestic terminals, but as many as 20 of the other terminals on the CONCOR terminal map also offer domestic services. As a matter of policy, most of the new terminals being introduced are now being planned as combined domestic/international terminals.
The main asset in which domestic cargo is carried is the standard 20ft container. CONCOR's fleet of TEUs in domestic service is currently at approximately 8500 TEUS. Of these, some are owned and some are brought in on short or long term lease depending on the demand requirements. Besides leasing, CONCOR also uses conventional ISO (international) containers by offering special Cabotage rates for empty movements. In this practice, containers that would otherwise move as empty are 'borrowed'/leased on an extreme short term basis (usually for a single trip) for domestic cargo movement, thereby increasing the carrying capacity for domestic cargo as a whole. There are also different types of specialty containers such as Open Top, Side Doors, Tanks, and 22ft/high cube containers to cater to special types of cargo.
The thrust of domestic operations is to run a series of point to point scheduled trains. These 'CONTRACK' services form the spokes in a wider hub-spoke strategy whereby cargo is consolidated through road or even rail, at major hub terminals from where such CONTRACK services operate.
Extensive movement of shipping-line empty containers is undertaken by CONCOR to balance the differential levels of exports and imports in the country today. By "Cabotaging" these containers. CONCOR can offer a substantial discount to both shipping lines and the potential domestic client. This seen as an area of focus and a strategy to boost volumes and profitability.For the charging of freight, all commodities carried by CONCOR fall into three categories:
- CC(carrying capacity): These are heavy commodities, which when stuffed normally reach the carrying capacity of the container (usually 21.5t in a 20' container, and 27.5t in the 40' container) before the container is filled to its volumetric capacity. The Indian Railways has only retained 5 specific commodities as 'CC' for use of CONCOR. These are (1) Cement, (2) Iron & Steel despatched from steel plants, (3)Petroleum and other hydrocarbon oils, (4) Grains & Pulses, and (5) Edible Salt.
- M (mixed goods): Commodities other than the five listed above, which have 'CC' loadability in the Railway Goods tariff are included in this category. When commodities with 'CC' loadability and less than 'CC' loadability are loaded in a container, they will also be charged under this category.
- W (weight condition): These are light commodities which have loadability less than 'CC' even after occupying the total space of a container. These commodities are separately listed in the Railway Goods Tariff.
List of CC, M, and W commodities as per Railway TariffCONCOR's business strategy for its domestic business growth can be summed up as under:-
- CONCOR plans to become more flexible in the pricing of services. Road hauliers have strong leverage in varying their prices to suit fast changing market conditions. While CONCOR cannot match the road hauliers' flexibility in pricing, but the company can leverage its own strengths of being a rail service provider, as also a terminal/warehouse operator such that it has door service capability. It can also offer discounts on volumes, customer profile, cargo characteristics, container availability, empty flow patterns etc.
- We also plan to reduce our empty return radio (ERR), in order to reduce the amount of unproductive haulage, and offer more competitive prices.
- Consolidation of Cargoes: Cargo consolidation at originating terminals will not remain the domain of freight forwarders only. CONCOR itself plans to enter into consolidation and distribution management systems.
- Need has been felt not only for customization of services, but also for the assets in service. Containers, terminals, warehouses, wagons etc. will be designed to customer requirements. The Company may also invite customer's stake holding (financial commitment) in the asset to be provided.
- The road hub and rail spoke concept will be extensively used by CONCOR to feed hubs from which trains can be run to the next major hub. This system will help CONCOR achieve complementarity between road and rail in its operation.