Adani Logistics to shut down ICD at Kanech in Ludhiana

Adani Logistics Services Private Limited, a unit of Adani Logistics Ltd, will shut its inland container depot (ICD) at Kanech in Ludhiana district from June 25, in a first clear sign that a steep fall in export-import (EXIM) container volumes due to Covid-19 has started to hurt dry-port operators.

Ludhiana generates a throughput of about 25,000 twenty-foot equivalent units (TEUs) a month.

“In the same catchment area of Ludhiana, there are seven ICDs including Concor and GatewayRail Freight, and those volumes are even further down due to the pandemic,” said a container industry consultant.

“What will happen is, with the pandemic hitting the industries and trade, some ICDs will be closed. People thought that the economy will continue to grow at a big pace, so they said ok if not in two years, then in 3-5 years, they will start making money. But with the outbreak of Covid, all those projections have been pushed back by at least 2-3 years. That is the reality which will start hitting a lot of people. That would be the basic reason behind the closure of ICD Kanech,” he added.

In a public notice issued on Monday, Adani Logistics Services informed its customers that it will stop accepting EXIM cargo at the Kanech ICD from June 25 and will be applying for the de-notification of the custodian ship under Section 45(1) of Customs Act.

Adani Group (Logistics Division) said it would continue to serve Ludhiana trade through ICD Kila Raipur, and urged customers to plan their EXIM shipments accordingly.

Bottom line hit

A big player like Adani closing down an ICD brings out the kind of stress on the bottom line of all the dry ports in the country due to the impact of Covid, the container industry consultant said.

Adani Logistics may convert the ICD, which has a rail siding, into a private freight terminal/ purely domestic terminal or a warehouse. The fixed cost of running an ICD involves paying the salaries of Customs officials posted at the facility by the company, estimated at some ₹2 crore per annum.