With over 60% market share in India’s container rail logistics business, the Container Corporation of India (CONCOR) is at the forefront of Indian Railways‘ ambitious plans to increase its share in the logistics sector. The state-run entity is diversifying its commodity mix and adding new terminals, containers, rakes and services to strengthen its dominance. In a conversation with Manu Kaushik, CONCOR’s chairman and managing director Sanjay Swarup spoke about the company’s growth strategies. Edited excerpts:
Q: What is your strategy behind the integrated logistics solutions?
The integrated logistics is a focus area for the management. Under this, once a container/cargo reaches a terminal, we provide customers with warehousing facilities, value addition services, and last-mile and first-mile (FMLM) delivery.
We have graduated from a pure rail operator to an “end-to-end” logistics service provider. Launched around three years ago, this service is available to customers on pan-India basis for both export-import (Exim) and domestic segments. The customers are now able to avail door pickup/door delivery services through a mobile app. The total FMLM volume in FY25 stood at 0.78 million twenty-foot equivalent units (TEUs). The FMLM service constitutes around 35% of our total volume. The target is take it to 100% in current financial year.
Q: The company is investing heavily into sustainability, especially in areas of solar power and a shift towards LNG trailer.
The last decade marked the onset of environmental, social and governance (ESG) related regulations and in the next decade, ESG will take the centrestage. From our terminals to the shippers’ premises, the movement of goods happens by road.
Till recently, we were using just diesel vehicles. We have decided to switch to LNG recently. In one fill, a 55-tonne payload powered by LNG can go to up to 1,000 kms so we can cover a good area. We have deployed 129 LNG-powered trailers at our terminals located in Chennai, Vadodara, Mumbai, Nagpur, Tughlakabad and Khatuwas. This is the largest such deployment by any container train operator in the country. Orders for 100 more LNG trucks and trailers have already been placed. We have signed agreement with IOCL, IGL and GAIL for developing LNG infrastructure at our terminals across the country.
Simultaneously, the company is discussing the possibility of having electric vehicles (EVs) in the future. We are also getting into niche warehousing by setting up first net zero warehouse with 1,39,000 sq. ft. area at Sriperumbudur near Chennai.
Q: What’s the guidance on the capex over the next few years. What will be the major focus areas from the investment point of view?
We are planning to set up around 34 new terminals in the next 3-5 years taking our total terminal count to 100 terminals across the country. In current fiscal, the capex allocation is around Rs 860 crore. In the next 3-4 years, the capex will be around Rs 800-900 crore per annum.
The focus areas for capex investment include development of multi-modal logistics parks, upgrading the IT framework, acquisition of special purpose heavy capacity containers, container handling equipment (diesel and electric), LNG trucks and high-capacity rolling stocks. CONCOR is planning to add around 200 rakes over the next five years.
Q: CONCOR has reassessed the useful life of its wagons, and extended their lifespan from 15 to 30 years. How this will help the company?
As per the Railway finance code, average life of container wagons is 35 years. Closer to the end of this codal life, the condition of wagons is examined by the railway workshops, and based on such examination either the wagon is continued in service or is condemned.
CONCOR was considering a life of only 15 years for wagons taking cue from the schedule of Companies Act. However, CONCOR’s wagons are manufactured by railway standards, run over Indian railways system and are maintained and condemned by Indian Railways workshops. Therefore, life of CONCOR’s wagons should be governed by the railways relevant code. To remain on a conservative side, for the purpose of financial analysis and depreciation life of CONCOR’s wagons can safely be adopted as 30 years.
Q: Market analysts see a weak volume outlook over the next two years. What is your take on the volumes scenario, both for the domestic and export-import markets?
While we are closely following the various geopolitical developments across the globe and their impact of container logistics industry, we are hopeful of a growth of around 10% in the Exim segment and around 20% in domestic business in FY26.
Q: CONCOR has plans to diversify into new product categories, what’s the objective of this?
We have identified new areas to expand the bouquet of services. We are aiming at broadening our commodity mix at a significant scale. There are big plans to enter into the business of cement in bulk form in the current fiscal. We are also taking steps to enter into niche warehousing through PPP (public private partnership) model. A tender for construction of (niche) warehouse at our terminal located at Channi (Vadodara) is currently being finalised.
In addition, we are expanding our services for managing automobile logistics. Also on the anvil is the efforts to tap liquid cargo logistics for which we are in constant touch with the concerned stakeholders..
In FY25, the company has surpassed 5 million TEUs in volumes, which is the highest-ever throughput by CONCOR since its inception.
Q: CONCOR plans to procure 1,000 tank containers. What’s the purpose of this large procurement?
As we the enter the business of cement in bulk form, the company has placed orders for procuring 500 tank containers from Braithwate, which is a PSU under the ministry of railways. The first lot of 90 indigenously-manufactured and specially-designed tank containers have already been received. A tender for procuring 500 more tank containers has been floated. The cement is produced in bulk and consumed in bulk. In between, there’s a bagging system. It’s an inefficient system. We are disrupting the market with tank containers where the containers will be stuffed with cement at the originating point (at the cement factory), and they will be de-stuffed at the destination point. This will boost our domestic volumes even further.