Freight companies to go multi-modal

Though the opening up of container traffic to private players is expected to eat into the road sector's share in the short term, the future may see the two converge. Experts predict a bright future for multi-modal transport.

While companies like Pipavav Railway Corporation Ltd and India Infrastructure Ltd-APL have their own shipping lines, which enables them to provide last-mile connectivity, Container Corporation of India (Concor) and road companies like Delhi Assam Roadways Corporation Ltd have plans to offer multi-modal transport services.

Companies with a strong hold on sea and rail routes will have an edge over others in providing last-mile connectivity and will also eat into the road sector's share of container traffic business.

In this fast-changing scenario, though Concor and road companies do not see any initial threat from the new container traffic operators, they have started preparing for more competition.

Concor has decided to ally with private container companies to take on the road operators. Transport companies are also gearing up by buying new vehicles and offering last-mile connectivity.

"We don't see any competition at least for the next three years as most private sector operators do not have the infrastructure like ICD terminals (Concor has 56), warehouses or wagons," a senior executive of Concor said.

Concor has tied up with seven of the 13 private sector operators who will share Railways' infrastructure for a fee. "Our strategy is to come together and take on the road sector through sharing," a Concor executive said.

Gateway Parks, for instance, is running a container train that it has taken on lease from Concor.

But roadways companies are not losing their sleep as they know that last-mile connectivity is their biggest advantage.

"Of course there might be some diversion of business to rail, but we are taking on the challenge by buying new and larger vehicles and recruiting MBAs and engineers. With more highways coming up, we can strengthen last-mile connectivity further," a senior executive of the Bombay Goods Transport Association said.

Roadways companies say the rail route between Delhi and JNPT port near Mumbai, which is a significant exim route (for which 10 players including Concor have paid Rs 50 crore each as licence fee), will be unable to handle the increased container traffic.