With the Railways and 14 private container train operators (CTOs) clashing over piecemeal traffic of bulk commodities, the Indian Railways have got back with a massive increase in container haulage charges for pig iron and sponge iron. The cost of moving these commodities has almost doubled. Overall charges of five other notified commodities has gone up 20 per cent.
Simultaneously, haulage for low-rated commodities like sugar, oil cakes and seeds, chemical manures and foodgrains has been cut by 5-20 per cent by moving them out of notified commodity list and putting them in freight all kind (FAK) slab.
The increases came on the heels of the earlier 20 per cent rise in freight rates. The changes were introduced on the day Dinesh Trivedi, the former rail minister proposed a rise in passenger fares, too, through the Budget.
| FREIGHT FACTOR Container-class charges for notified commodities in 20-feet container | |||
| For 1,000 km | |||
| Commodity Group | Old rates | New rates | % Chg |
| Cement, bricks & stones | 23,547 | 28,257 | 20 |
| Iron & steel, alumina | 28,257 | 33,907 | 20 |
| Petroleum products & gases | 31,395 | 37,674 | 20 |
| Pig iron & sponge iron* | 15,240# | 30,138 | 98 |
| For 2,000 km | |||
| Cement, bricks & stones | 43,617 | 52,341 | 20 |
| Iron & steel, alumina | 52,338 | 62,809 | 20 |
| Petroleum products & gases | 58,155 | 69,788 | 20 |
| Pig iron & sponge iron* | 30,120# | 55,830 | 85 |
| * Pig iron & sponge iron become expensive after bringing it in Notified Commodities List; Sugar, oil cakes and seeds, chemical manures and foodgrains taken out of Notified Commodities List; # Freight all kinds rate; Railways charge container operators a haulage charge for running trains on its network Rates are in Rs for a 20-ft container Source: Indian Railways | |||
The bigger part of the impact would be borne by private operators (there are 14 private container train operators) such as the Adani group, Hind Terminals, Arshiya Rail Infrastructure, APL India Linx, and Gateway Rail.
However, railway-owned Container Corporation of India would also need to pay more.
According to Ramesh Chandra Dubey, president, Association of Container Train Operators, "The focus is expected to shift towards the premium segment in the Exim (export-import) business, to offset the squeezing of profit margins in the domestic business after the (latest) imposition. The Exim business is comparatively profitable to service, as compared to domestic business."
Six notified commodity groups are cement and bricks and stones; food grains & chemical manures; iron and steel & alumina and petroleum products and gases.
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Under the existing norms, when a notified commodity is loaded in more than thirty containers out of a 90-container train, the haulage charge for such container is levied on the higher CCR slab. For the container loaded with two or more commodities, the highest CCR of all the commodities will be levied for all.
If 30 or less containers in a rake are loaded with any of the notified commodities, whether single or with other commodities, the haulage charge will be levied at the lower FAK rate.
The railways charge container operators for running their trains on its network.
The railways charge haulage rates either on Container Class Rates (CCR) or Freight All Kind (FAK) rates. The former are about 90 per cent higher. With the latest set of changes, there are six notified commodities being charged at CCR ones; the rest are charged on FAK.
In Exim, the haulage on all the commodities is charged at FAK. Since the container business is already Exim dominated, with domestic business being around 25 per cent of the business, this move will further hit the domestic container business.