Category Archives: Rail/Road

Indian Institute of Technology (IIT) Guwahati has joined hands with Airbus to expand aviation and logistics education in Assam, thereby enhancing the socio-economic landscape of the northeastern region. The collaboration follows productive discussions with officials from the Assam Government’s Transport, Skill, and Industries Departments. To this effect, a Non-Disclosure Agreement (NDA) was signed between Prof. Devendra Jalihal, Director of IIT Guwahati, and Rémi Maillard, President and Managing Director at Airbus India Private Limited.

CHAMP Cargosystems has shared that a growing number of Asia Pacific airlines have signed up to use its technology supporting air cargo compliance with customs and security measures. The IT company said that there is a demand for software solutions that simplify regulatory compliance in line with government bodies requesting more granular air cargo pre-loading and pre-arrival detail. Existing CHAMP customers Biman Bangladesh, Korean Air, Sichuan Airlines and Vietnam Airlines have this year signed multi-year contracts for Traxon Global Security (TGS), a platform designed to help carriers manage their Pre-Loading Advance Cargo Information (PLACI) filing. TGS is designed to enable customers to be fully compliant with pre-loading security screenings including the European Union’s ICS2, the United States ACAS, the UK’s PreDICT, the UAE’s NAIC and Canada’s PACT, which is expected to become mandatory in the fourth quarter of 2024. Additionally, Biman Bangladesh, Vietnam Airlines, China Southern, and China Cargo Airlines have signed multi-year contracts for reporting tool, Traxon Global Customs. By using the tool, airlines are equipped with a streamlined information exchange featuring 60+ country customs authorities, regardless of format, communications protocols or processing rules. CHAMP’s technology enables companies to automate PLACI filing and remain to reduce the possibility of customs penalties or errors associated with misfiling.

Container Corporation of India (Concor) will soon begin coastal movement of goods as part of its multi-modal logistics strategy to offer a cheap, fast, and cleaner mode of transportation, says reports. In June this year, Concor and Shipping Corporation of India (SCI) had signed MoU to explore business opportunities for leveraging the advantage of each other’s infrastructure and experience in synergy to offer seamless and cost-effective end-to-end logistics services to customers under a single window. Sanjay Swarup, CMD, Concor stated that coastal shipping is a very eco-friendly mode of transport. The company had launched the coastal shipping services pre-Covid in Jan 2019 and had developed some streams from Gujarat to the South. The service was stopped in 2020 during Covid. “So now we have collaborated with the Shipping Corporation and very soon, we will be starting coastal movement from Gujarat to South India and even from South to the eastern side of the country. So you will hear very soon that we are going to start the coastal movement,” said officials in reports. The MoU will enable SCI’s shipping services to develop Concor’s footprint in overseas locations and also to foray into the field of coastal and inland waterways trade to offer a wide range of customisable logistics solutions for the benefit of trade at large.

The Nanded Division of South Central Railway (SCR) is all set to develop Gati Shakti Multi-Modal Cargo Terminal (GCT) at Hingoli Railway Station to enhance freight revenue, and decongest rail networks. According to reports, the facility is expected to increase revenue,  help in processing freight commodities for transportation by rail and also provide enhanced safety and security during transportation. Rajesh Shinde, the public relations officer (PRO) of the Nanded Division, confirmed the news in versions reports and said that the terminal at Hingoli will be developed on the railway land. The open yard opposite the station building has been chosen as the construction site for the terminal.

DP World will be providing an intermodal rail service for containerised car shipments from June between Mexico, the US and Canada. The port terminal and inland logistics provider is using 16-metre (53ft) containers with R-Rak cassette systems in answer to the ro-ro and multilevel rail-capacity shortage for vehicle shipments in North America, said official reports. The 16-metre containers, which are common for general freight shipments in North America, can accommodate up to six passenger vehicles on special racking systems, compared to the four maximum that can be shipped in a standard 12.2m (40ft) container, which DP World said enhances efficiency and reduces costs for OEM customers. Four larger SUV-sized cars can be shipped in the containers. DP World said in a statement that it is the only logistics company currently providing the intermodal 53ft container solution for finished vehicles.

Indian Railways in April recorded 1.45 per cent growth rate in its freight volumes, dragged down by weak numbers in coal transportation. It transported 128.29 million tonnes (mt) of goods, witnessing a fall of nearly 6 mt in its coal traffic, according to reports. “Freight revenue of Rs 14,075.14 crore was achieved in April 2024 against Rs 13,893.27 crore in April 2023, thereby showing an improvement of about 1.30 per cent over the last year,” the official said. While the railways increased its cargo in other segments, its coal traffic fell nearly 9 per cent in April to 57.64 mt year-on-year. The volumes were also slightly lower than in 2022, when the railways had to cancel more than 1,000 train trips to meet increasing coal demand, indicating supply-chain readjustment on account of changing weather patterns. Coal is the mainstay of railways’ freight earnings and accounts for 50 per cent of the transporter’s cargo volumes and revenue. A cooler start to the summer has been held to be the reason for coal volumes being subdued in April. The northern and western parts of India, which are the core demand drivers for thermal coal, witnessed cooler than expected temperatures. Northern and western states form the largest chunk of India’s power demand. The eastern part of the country has been sweltering and also pushing power demand but it remains lower than the two other big regions, adds reports.

The Indian Railways plans to set up an additional 200 Gati Shakti Cargo Terminals (GCTs) to boost freight revenue, decongest rail networks, and enable faster movement. This expansion follows the successful implementation of the first 100 GCTs announced in the Union Budget 2022-23. GCTs are multi-modal terminals used by corporates to handle bulk cargo that is transported via rail. They are established under a policy that allows monetization of vacant Railway land through public-private partnerships (PPP). The first 100 GCTs were to be set up over 5 years from 2022-23. Progress of Phase 1 -77 out of the initial 100 GCTs have already been commissioned at a cost of around ₹5,400 crore. These terminals are located in states like West Bengal, Jharkhand, Odisha, Telangana, Tamil Nadu, and Uttar Pradesh. Major operators include Concor, Reliance, Adani, JSW, IOCL, and BPCL, among others. The remaining terminals are expected to be operational by the end of FY 2024-25. Buoyed by the positive response, Railways will tender for 200 more GCTs once the first 100 are completed. The additional terminals are estimated to require ₹12,000-14,000 crore in private investment. Each terminal is expected to cost an average of ₹65-70 crore, with some ranging from ₹50 crore to higher amounts. Development Models

Enhancing the efficiency and reliability of rail cargo movement is crucial for optimising logistics in India, says Adhendru Jain, Vice President, Rail and Inland Terminals, DP World Subcontinent. He adds, “The government’s strong focus on creation of DFCs and MMLPs are aimed at further improving the movement of cargo via rail. The 2024-25 interim budget for India’s Railways included the introduction of three new DFCs that will support multi-modal connectivity. Enabling public-private partnerships to further boost infrastructure development and improved efficiency of rail freight movement. The establishment of the Gati Shakti Multi-Modal Cargo Terminals coupled with the expansion of MMLPs, will greatly enhance accessibility across India’s key industrial hubs, facilitating seamless cargo movement. Addressing an imbalance in cargo movement, particularly evident in the major corridors of the North-East, requires a strategic shift towards rail-based transportation, reducing reliance on road networks and fostering equilibrium in cargo movement dynamics. Moreover, the integration of coastal, air, rail, and road modes into multimodal solutions promises a sustainable and efficient last-mile connectivity framework, ensuring optimal service delivery for customers nationwide.”

“Changing trade policies can have significant ramifications on global supply chains, influencing sourcing strategies, production locations, and distribution networks,” says Keku Bomi Gazder, MD and CEO, Aviapro Logistic. He adds, “Tariffs, trade agreements, and geopolitical tensions can disrupt established supply chains, leading to increased costs, delays, and uncertainties for businesses worldwide. As a company operating within this complex landscape, we closely monitor trade policy developments and adapt our strategies accordingly. We prioritize agility and resilience in our supply chain operations to mitigate risks associated with policy changes. Additionally, we maintain open communication channels with our suppliers and partners to swiftly address any emerging challenges. From the government, we expect transparent and consistent trade policies that foster a conducive environment for international trade. Clear regulations, minimal bureaucratic hurdles, and a commitment to free and fair trade are essential for businesses to thrive in the global marketplace. Furthermore, we encourage policymakers to engage in constructive dialogues with industry stakeholders to understand their concerns and develop policies that support sustainable economic growth. Additionally, investments in infrastructure, technology, and skill development are crucial to enhance the competitiveness of Indian businesses on the global stage. By fostering an enabling environment for trade and innovation, the government can contribute to the resilience and prosperity of the Indian economy amidst evolving global dynamics.”

ICRA expects the revenues of the Indian road logistics industry to remain range-bound and grow at sedate pace of 3-6% in FY2025, given the limited ability of players to increase the freight rates, expected softening in Government capex during the elections (given the Model Code of Conduct requirements) and moderation in consumer demand sentiments amid high inflation and interest rates. The outlook for the sector continues to be Stable, fuelled by a sustained momentum in economic activities, enhanced traction of organised trade and continued support from varied segments like e-commerce, FMCG, retail, pharmaceuticals, and industrial goods. Mr. Suprio Banerjee, Vice President & Sector Head – Corporate Ratings, ICRA Limited, said: “ICRA’s sample set witnessed a modest revenue growth of 2.3% in 9M FY2024 on a YoY basis amidst tapering demand due to high inflation, an uneven monsoon, a high interest rate regime and relatively muted festive season. Thus, on an elevated base of FY2023, ICRA estimates a low single digit growth of 2-5% in FY2024. The growth for road logistics sector in FY2025 is expected to be in the range of 3-6% , owing to the impact on demand from high inflation, high interest rate regime and soft (though improving) consumer sentiment. The industry operating profit margin contracted to 11.2% in 9M FY2024 (down ~150 bps YoY), on account of increase in operating costs (ex-fuel) due to the high inflationary regime, and pressure on realisations, given the sticky retail diesel rates, limiting any formula-driven price rise. ICRA expects the margins to remain in the range of 10.5-12.5% in FY2024 and FY2025 over 12.4% in FY2023 amidst inflationary headwinds and despite benefits of efficiency gains due to increasing digitalisation and value-added …