Not looking at investing in rail assets now, says Maersk South Asia head Steve Felder

Maersk, a leading global player in the integrated container logistics space, ramped up its rail offerings in India to negate the disruptions at the road transport level brought by the coronavirus pandemic.

Steve Felder, Managing Director, Maersk South Asia, in an interview shared his views about the private freight trains initiative of the Indian Railways and the company’s plans.

Q: How does Maersk view the private freight trains project of Indian Railways?

A: Logistics forms the backbone of trade, and to strengthen this backbone, one of the most important areas of development is that of infrastructure. In inland logistics, rail is one of the quickest, safest and most environmentally friendly modes of transport for cargo. More freight trains getting privatised will lead to a more competitive market, which in many ways helps trade to grow.

Q: What is the share of rail segment in revenues from India operations?

A: To put it in perspective, rail services contribute to slightly less than half of the total revenue coming from landside logistics in India. During the last few months, the services provided on rails have increased owing to the hurdles faced during the lockdowns. Trucking came under pressure in the early stages of the lockdowns, with state borders closed and swathes of truck drivers retreating to their home villages in fear of the pandemic. This is when the rail service really showed its mettle, and helped to keep cargo – and trade – moving.

Q: Is Maersk looking at participating in the private freight trains project of Indian Railways?

A: Maersk is in the business of providing integrated container logistics solutions. This includes providing services on rail for landside logistics as required by our customers. For doing so, we partner with multiple rail providers in order find the best suited solution for our customers. However, we are not looking at investing in rail assets at the moment.

Q: How does it view Indian operations for its growth prospects?

A: India is a country of immense potential – both in terms of exports and imports, and we, being in the business of enabling trade and simplifying supply chains for our customers, are positive about our growth in the Indian market. We are offering a host of services and solutions to importers and exporters in India. We have developed and curated special products that are suited to the local requirements, and are constantly in touch with our customers to understand their needs so as to provide the right solutions.

In terms of rail solutions, we have recently run dedicated services for certain customers, and are currently in the process of starting new routes to enable our customers to take full advantage of the potential that rail holds.

Q: Has there been a shift in working culture in Indian Railways in the past few years?

A: In terms of Indian Railways, we are noticing positive changes. One of the most important being a lot of agility in decision making in favour of trade. One of the best examples is the decision of reduction in empty hauls by 25 percent to support the trade last year, and a complete waiver on empty hauls during the early phases of lockdown to support business. This shows a definite shift in the way containerisation is seen by Indian Railways.