India pushes rail overhaul to nudge JNPT shippers away from trucking

As competition from road haulers intensifies amid sluggish volume growth, Indian rail authorities are linking with Jawaharlal Nehru Port Trust (JNPT) to devise new ways to optimize containerized rail capacity and shore up service competitiveness.

Touting it as a game-changing move, the Indian Railways, parent of Container Corporation of India (Concor), has opened consultations with stakeholders to introduce double-stack “dwarf container” train operations.

“The ‘dwarf’ containers provide a 67 percent increase in volume when double-stacked and can carry a weight of 71 tons, against 40 tons by an ISO container,” JNPT said in a trade advisory.

The Indian Railways adopted the use of dwarf containers under its service profile in July 2018 as part of proactive efforts to provide greater value to customers and fend off competitive pressure from over-the-road transport companies.

Typically, dwarf containers have about six feet of lift height — relatively shorter than other conventional boxes that when double-stacked create height issues for train operations on certain routes, particularly while traversing tunnels and bridges. On the other hand, in addition to the ability to maximize freight loads, trains laden with dwarf containers are considered a “one-size-fits-all” solution across electrified rail networks in the country.

“With the use of these double-stack dwarf containers, the cost of the unit will be significantly reduced due to the rail transport being cheaper than the road,” the Ministry of Railways said in a prior statement. “At the general freight rate, the double-stack dwarf container trains can generate more than 50 percent of the revenue.”

Another factor pushing authorities to reinvent their offerings is the increasing popularity of block train services, which they believe have had a cooling effect on shipper demand for normal rail transport. “Indian Railways lost a considerable amount of traffic to the road sector over the years when end-to-end running of block rakes was introduced. While this step had reduced wagon turnaround significantly, it had also closed avenues for booking of individual wagons,” JNPT said.

Dramatic gains for rail not expected

JNPT handles the bulk of India’s containerized trade. Currently, the port sends and receives 15 trains per day on average, peaking at up to 20 depending on demand and mostly operated by Concor.

Terminals at JNPT essentially work around an interoperable or mixed intermodal rail method for the movement of freight to and from inland container depots (ICDs). Although an inter-terminal model involves logistics complexities, it helps stakeholders turn around trains at a quicker pace because of cargo aggregation and distribution at a common on-dock yard for multiple terminals.

While a dwarf container-based intermodal solution could prove to be a tailwind in rail lifts, subject to cost competitiveness, it is unlikely to see any dramatic shift away from the traditional trucking mode at the port, which has much to do with end-to-end logistics advantages, according to industry sources. Varied terminal rail charges have also been a pain point for the shipper community.

On the upside, having fixed previous intra-port uneasiness over inter-terminal rail handling through the Aug. 1 implementation of a more collaborative rail arrangement, JNPT’s rail loads have seen some traction over the past months. New provisional port statistics put JNPT’s ICD volumes at 16.4 percent in August, 16.7 percent in September, 18 percent in October, 18.6 percent in November, and 16.5 percent in December, versus 16.9 percent, 15.3 percent, 15.5 percent, 14.8 percent, and 15 percent, respectively, in the same period in 2018.

But JNPT stakeholders will have to work even harder to reach a government rail target of 25 percent to enhance cargo flow. Toward that goal, all eyes are on the much-delayed opening of a 932-mile western-dedicated freight corridor connecting JNPT to northern hinterlands. PSA International’s new Bharat Mumbai Container Terminals (BMCT) will likely have a market edge because of its sophisticated on-dock rail infrastructure designed to align with the speedy connector.

With slowing trade growth, JNPT’s combined April-December throughput was flat compared with the same period in 2018, at 3.8 million TEU.

Source: JOC