Container train operators apply brakes on buying new rakes

With the private container train operators facing the impact of the slowdown, those who do not have their own trains are looking at renting trains from other private players who own them rather than investing in buying them.

Among the 16 private train operators in India, there are 80 rakes of which 20% are sitting idle. Moreover, of these private players, only six have their own trains while others are yet to invest in buying their own. As the slowdown has affected business, these players are in a wait and watch mode to buy new trains. In the meantime, they are planning to rent trains on the basis of demand on a profit sharing model. Boxtrans, Hind Terminal, Adani Logistics, APL are among the six who have their own rakes.

?As 20% of the rakes are sitting idle, it is more likely that the players without their own trains are looking at renting them from other players for the time being,? commented RC Dubey, president, Container Train Operators Association. ?There is not yet a fixed rental model, rather it is likely to happen on a case to case basis on a profit sharing model,? he added.

Dubai Ports World, which has entered into container rail road business in 2007, already has seven trains of their own in India. However, this year, according to the need, they might add more trains, but instead of buying they have plans to lease idle rakes.

?We currently operate seven trains. Whilst there are no plans to invest in more trains in the immediate 3-4 months, we will provide a service wherever and whenever our customers need one. We will look for opportunities to lease idle capacity from other players depending on the market potential and will review the terms of lease as and when these opportunities come up,? commented Rustom Dastoor, CEO, DP World.

A stabling rake costs Rs 30,000-Rs 35,000 per day. Hence, according to industry experts many players, mainly those in the Exim business are renting out the rakes.

?The Exim business is hit, but our rakes are always on the move. Hence we have not yet seen our rakes sitting idle,? commented a spokesperson from Hind Terminal on conditions of anonymity.

However, according to an industry insider all the six train operators with their own trains are leasing out rakes to the new players on a short term basis.

?This is a new trend because of the slowdown due to which mainly the players in the Exim business are hit. All the players with their own rakes are leasing the rakes to new players without trains depending on short requirement. This is definitely not a long term arrangement,? commented the expert.