India’s CONCOR (Container Corporation of India) is eyeing a larger play with introduction of direct port delivery (DPD) facilities, introduction of more tank containers for bulk cement movement; apart from end-to-end logistic solutions with major corporates. Long term agreement with shipping lines are also expected. Talks are in “advanced stages”.
According to Sanjay Swarup, Chairman and Managing Director, CONCOR, long-term tie-up with shipping lines, will be signed in September.
“We are quite strongly looking at DPD movements from ports to hinterland. Then we are going for additional business and new terminals, which is another growth driver for us,” he said during a recent analyst call.
According to him, movement of bulk cement in tank containers, “will start giving business only in Q3” (Oct – Dec). “(In) Q2 we will not be able to get any business because the containers orders we have given, they are being manufactured,” he said adding that there is a supply constraint. There have been detailed dialogue with the cement manufacturers ; who “are ready with the business.”
CONCOR officials said, orders for 500 containers - for movement of bulk cement - have been placed with to Braithwaite Limited, another Railway PSU. The prototype is in the manufacturing stage.
“When we start getting the containers from Braithwaite, they shall be offering 50 containers per month to us starting from third quarter. So I think in first month only in September, we can be getting first rake and subsequently after every month, every 2 months, we shall be adding one rake there,”the official explained.
Ocean Freight Rate Softening
According to Swarup, containerised cargo movement in the China to America circuit, “was overloaded”, at least till July 31, “due to some duty issues”. The Chinese goods were being pushed to American markets.
“(In) August that overloading has eased. So there’s a lot of movement of containers and vessels in India, Western countries stream. This has resulted in the softening of ocean freight and more availability of containers and vessels for India. So this will be a major reason for growth in export-imports from India, the CMD said.
Softening of ocean freight means the low-value imports like wastepaper, scrap, this will be coming in a big way for India. And exports also move up.
“For the last one month already, there is healthy growth in exports,” Swarup said adding that this has led to an increase in CONCOR’s market share in EXIM at Mundra port and Pipavav port.
From July peak of $5937 per 40ft box, there has been an over 10 per cent decline in August .
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The latest Drewry world container index stood at $5,319 per 40ft container (FEU) for August 22, down 2 per cent week-on-week from $5428 per FEU. Present container freight rates are 49 per cent below the previous pandemic peak of $10,377 in September 2021.
The average composite index for the year-to-date is $ 4,077 per 40 ft container, which is $1,273 higher than the 10-year average rate of $2,803.
Transpacific traffic rates increasing
However, there was a recent uptick in transpacific Eastbound freight rates to the US West Coast and East Coast. This could be attributed to the looming port strike on October 1 and the anticipated rush to ship goods before the strike begins.
“Rates on transpacific trade to continue increasing in the coming weeks,” Drewry’s said in a report.
Freight rates from Shanghai to Genoa decreased 5 per cent to $6,788 per 40ft container; while from Shanghai to Rotterdam dropped 4 per cent to $7,429 per FEU. Spot rates from Rotterdam to New York fell 1 per cent to $1,934 per 40ft box.
Conversely, rates from Shanghai to Los Angeles increased 2 per cent to $6,401 per 40ft container. Similarly, rates from Shanghai to New York inched up 1 per cent to $8,811 per FEU. Meanwhile, rates from Rotterdam to Shanghai, Los Angeles to Shanghai and New York to Rotterdam remain stable.
Tapping corporates
CONCOR is also in talks for long term supply agreements with corporates providing them “total logistics package”. It is in discussion with some like Vedanta, Tata, Reliance and Jindals. Facilities promised include “assured supply” for domestic trade; and also EXIM (for some).
“We are tying up with big businesses. .... like Vedanta, Jindal, Tata. We are in talks with them at advanced stages...give them total logistic package for their pan-India movement utilizing our pan-India service,” Swarup said.
According to him, with “Jindal (there is a ) partial agreement only for EXIM”. While there is none with Tata and CONCOR will look “at a new (one)”, in case of Jindals the plan is to increase the scope of the agreement to include both EXIM and domestic trade.
- Also read: CONCOR inks agreement with PSA MESA