The coaches have been loaded and will move out on 3rd July after 11:00 pm. They are expected to reach Delhi by the 12th of July, 2009.

Panprojects has sub-contracted the job to Allcargo Global Logistics (AGL) and is using AGL’s axles as it does not own axles in India. The coaches are being moved on four trailers on a set of 12 hydraulic Goldhofer axles per trailer.

The coaches were to be originally moved on rail, says Sharmila Amin, South Asia Area Head, Panprojects Division, Panalpina World Transport (India) Pvt. Ltd, “Initially, Bombardier had permission to move four coaches per rake but they wanted to move 12 coaches per rake as then the number of trips made will be less.”

She adds, “If four coaches are moved as a unit then the number of trips will increase. Since it is a very busy route, it cannot be kept occupied all the time. Thus, they have not got the permission and the coaches are being moved by road.”

The route for the movement is Baroda – Ahmedabad – Himmat Nagar – Udaipur – Chipurgarh – Nasirabad – Kishangarh – Jaipur – Gurgaon – Khyber Pass.

Panprojects expects to move the next batch of coaches from Savli in two weeks.

Eight coaches have already been air-lifted by Panprojects on behalf of Bombardier from Parchim Airport, Germany to Delhi International Airport in Antonov AN-124 full charter flights.

Panprojects is simultaneously shipping coaches from the Port of Hamburg to Mundra Port. The fourth shipment will arrive at Mundra on 6th of July, taking the total number of coaches imported by sea to 16.

Some key executives from the industry hinted at the possibility that the ground handlers are not ready with the required infrastructure, and are of the opinion that they should be penalised for the delay.

However, many informed sources very clearly indicated that the domestic airlines are the ones vehemently opposing the new ground handling policy the most.

Explaining the primary reason for opposition by the airlines, A. K. Sachdev, COO, Go Air says, “If the policy is implemented, the cost of our ground handling operations per flight will increase by about five times, from Rs. 5000-6000 to Rs.25,000 – 30,000.”

However, G. V. Godbole, senior manager, ground handling, Air India is of the opinion that the cost seem to increase only for smaller airlines with few aircrafts. Bigger ones wouldn’t have this problem, he says.

Another senior executive from Air India with immense know-how of ground handling operations in India stated that since the policy is to be enforced only at metro airports, domestic airlines can continue their current state of operations at other airports.

Overall, it appears that amongst the airlines, Air India is the only one supporting this policy, while the other private domestic airlines still seem unhappy with it.

The 275 ton reactor, which was manufactured over the past one year, is being moved from L&T’s Powai facility to the Mumbai Port by road. It left the L&T Powai campus from Gate No. 1 at 1:00 am on the 23nd June, 2009.

The reactor will leave from Mumbai port by 27th June morning in an Inter Marine USA vessel specially called in for moving it. It is expected to reach Port of Xingang in China by the 15th of July, 2009.

“It is the first time that a project cargo of this length is being moved by road till the port. Earlier in 2001 we moved a 50 m PP reactor for Sinopec China but that was from Powai to Mankhurd Jetty, Natvar Parikh yard,” says Pradeep Berde, Materials & Logistics – FPEX, L&T.

He further informs, “Majority of the transporters were not ready to take up the job. They thought it was impossible to move such a long reactor by road to the port because of the narrow roads en route. We at L&T personally did a road survey, mapped out each and every turning and checked whether the vehicle can take the turns. Our survey and presentation convinced the transporter to take up the job.”

The contract has been given to the ReshamSingh Group at a cost of Rs 24.5 lakhs. Owing to the length of the reactor it is being moved on two sets of hydraulic axles of 10 and 8 respectively.

Berde informs, “Ten hydraulic axles are Cometto make and are owned by ReshamSingh. The other eight have been hired from Nabros Transport Pvt. Ltd. by ReshamSingh because of insufficient number of axles with them.”

A 460 hp Volvo prime mover is being used for the transportation. Another 400 hp Volvo prime mover is being taken along as a back-up.

However, the rapid decline in container volumes over the last few quarters has now revealed that some players might have gone over enthusiastic on CFS development, and consequently pushed the supply on the higher side. Consolidation, if not complete closure, of some CFSs seems inevitable. In fact, there have been a few cases where the smaller ones unable to attract enough traffic have been on the verge of closing down. In such a scenario, to avoid closure, the bigger and stable companies have either taken over the small CFSs or have had an amalgamation of services. For instance, the Punjab State Container and Warehousing Corporation (Punjab Conware) CFS owned by Punjab government was taken over by Gateway Distriparks Ltd in order to avoid the closure of the CFS.

One of the biggest reasons for so many smaller private CFSs sprouting up within a few kilometres of the ports (mainly JNPT) was the pricing advantage they enjoyed over the ones located within the land owned by the ports.

Discussing the tariff differences between these two types of CFSs, Manish Puri, Principal Infrastructure, Trans Care India says, “A few CFSs functioning inside the ports come under the authority of Tariff Authority for Major Ports (TAMP) set up by the government, which decides all tariffs within the port. So anyone operating a CFS within the port will have to take permission from the port to operate the CFS. Other government owned as well as privately owned CFSs, which are currently functioning outside the ports do not come under any price regulation. Individual operators have complete freedom for deciding the prices for services being provided by them.”

Since there are no price controls, there seems to be a lot of competition amongst the private CFS players. Looking at the number of CFSs near the ports, the profitability of these freight stations is bound to get affected, which ultimately has led these private companies to look at options like competitive pricing to get business. “Pricing indeed has gone down in the past five years due to the growing competition to attract traffic as newer CFSs have come up. In case of the CFS business, supply has always been more than the demand even when the economy was better,” says N Shankar, National Head–Ocean Freight, AFL Dachser Pvt. Ltd.

Problems like quality of connectivity of the CFSs to the port terminal are now amplifying the effects of the downturn. These problems have always been there at all the major ports but the inability of government authorities to rectify these has taken a severe toll on the container volumes passing through the ports. Compelled by the apathy of the government authorities, some of the private parties had to take the necessary steps and bear the heavy expenditure of maintaining/constructing these roads in an attempt to improve their business prospects.

This is in stark contrast to some of the other private ports that have been very proactive in activities like building roads and basic infrastructure in an attempt to consistently attract more traffic. Vijay Minocha, Managing Director, Emirates Shipping Line points out, “In case of Mundra port, the last mile rail connectivity and also the nearby supportive infrastructure were taken care of by the Adanis and as a result of this the port is doing exceptionally well today. Either you should have the money to take care of these otherwise you are left at the mercy of the government for these important issues.”

There are also instances when there is excess traffic to handle due to delay in vessel schedules as a result of which this sudden increase in traffic can’t be handled by the available number of trailers. At times like these, CFSs having their own fleet are better off as they can manage their turnaround time. The others that outsource their fleet do face problems, such as drivers not turning up on time and even faulty trucks and trailers, which affect the overall turnaround time leading to delays in container transport, in turn, leading to congestion at ports. Also at times, the customs procedures lead to containers getting stuck up en route and causing delays for the end-users.

Most CFSs exist within a 18 to 20 km radius from the port. This is more prominent around JNPT due to the unavailability and higher cost of acquiring land near the port. However, this distance from the terminals has its own limitations. “The increasing distance from the ports is tiresome in cases, especially, when the trailers have to traverse through populated areas of the city, which creates problems for the shipper as well as the consignee. The Indian model, in terms, of CFSs requires being in proximity to the terminals but simultaneously; the trailers do not have to go through a populated area. However, this is more of a problem at Chennai port. In the case of Nhava Sheva (JNPT), even CFSs slightly at a distance from the port don’t traverse through populated areas. So they will definitely have good container traffic subject, of course, to the quality of service they provide to the shipper and consignee in terms of tariff and facilities,” explains Minocha.

Shankar quotes the availability of clearance free land as another reason for the increasing distance between the CFSs and the terminals. “Since investing in land for CFSs is not for a matter of five years but 50 years, the players have to look for land that is completely encumbrance free and there is nobody to lay claim on that because these are huge investments. In my opinion, it is still better to have CFS in a radius of 20 km than having CFS in a 200 km radius,” he says.

The lack of adequate technology also seems to be a bit of problem in many CFSs. “Due to the absence of technology and systems, there are times when containers can’t be located in the yard, which makes the whole process cumbersome,” says Amar More, Global Head – Logistics Practice, Kale Consultants. Often, customers even face losses due to lack of trained labour in the CFS, which causes damage to cargo while handling.

Despite all these problems, the case for CFSs looks strong. “Before the concept of CFS was introduced, all processes like storage, custom evaluation, custom duty payment were carried out at the port leading to an overflow of containers at the port terminals. Ports’ capacity used to get constrained and simultaneously the customers ended up paying enormous amounts as demurrage to the ports,” says R Kumar, Deputy CEO, Gateway Distriparks Ltd, while talking about how CFSs have improved the overall processes and also cut down on demurrage charges to be paid by customers.

With the space at ports is now being utilised for pre-stacking containers before moving them out to the CFS, the turnaround time at the ports is improving allowing higher throughput. CFS owners are also looking at automating their services by implementing better systems. Currently, the key challenge for CFS operators would be to streamline processes and look at providing value-added services on the lines of logistics parks found in overseas markets.