The container traffic handling at all Indian gateway ports has grown at a CAGR of 9.84% during last ten years period, with numbers going up from 4.51 million TEUs in 2004-05 to 11.53 million TEUs in 2014-15 despite global slowdown prevailing from 2008. With the anticipated growth rate of external trade to be faster than GDP growth, better trends are expected to usher in future. Similarly, the possibilities of growth in container traffic in the Domestic sector are immense with continued strong trends in growth of manufacturing based GDP and impending need of the industry for "value added" services. Logistics parks, large cargo hubs will be the requirement of the industry in very near future, as large retail chains generate the demand for professionally managed cargo delivery systems.
Keeping in tune with the developments, CONCOR has already adopted suitable strategies for growth in the highly competitive external business environment emerging after almost a decade of opening up of Rail sector for container train operations in 2006. As one of the 17 licensed CTOs (Container Train Operators) in the field, Company is already focused on providing total logistics and transport solutions to its customers by holding on to its basic strengths and expanding its presence in all the segments of the transport value chain in Exim as well as Domestic business segments. Continuous attempts have been made in the recent past and still the further possibilities are being explored for strategic alliances, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain. The emergence of CONCOR as a group of 16 companies (comprising of CONCOR, four subsidiaries & eleven Joint Venture companies) is a testimony to this. There is a strong likelihood of the group size going up.
Encouraging have been the trends of extremely good growth in container handling at the key private port terminals of Mundra, Pipavav, Vizag and Tuticorin. This, and the impending growth in container handlings at the newly established port/transshipment terminals of Vallarpadam, Ennore, Krishnapatnam, Karaikal, Dahej, Hazira & likely emergence of some other minor ports in Gujarat like Nargol, Porbandar, Okha, Maroli etc. will have large effect on the hinterland movement of containers in the country. Further, the existing low hinterland penetration levels of the container traffic in existing ports are also bound to see many fold increase. This change in the environment offers immense potential for CONCOR to identify new business opportunities and remain the market leader by expanding into new corridors. Continuing its thrust in this area beyond JNP (third berth) and Cochin (Vallarpadm), CONCOR has plans to forge strategic partnerships with many of the newly emerging ports as the existing Joint Venture with M/s. MAERSK A/S Copenhagen for third birth at JN Port has already placed CONCOR in the category of highly successful Port terminals operators. This has opened new possibilities for further expansion in this field.
Though long haul by Rail will continue to remain the main stay of CONCOR's transportation plans, its focus will be on providing integrated transport services encompassing all modes. Business trends clearly indicate and demand more and more "door-to-door" clearances. This would entail providing single window clearance facilities to its customers, requiring close co-ordination and/or alliances with other relevant agencies and transport intermediaries for "door-to-door" movement of cargo in containers with all facilities provided under single roof for avoiding multiple handlings & associated costs. In order to compete with road sector that provides door-to-door movement of containers on the basis of single price, single window service through a single document, will be a key USP for the future. The company will continue to adopt cost effective key processes across various terminals and areas of business associated with key critical success factors, the factors which are important to its customers, through the process of Benchmarking.
CONCOR will also further innovate and promote the use of technology for minimizing operational costs, by way of continuing to adopt state-of-the-art technology and practices and maximizing movement of Double Stack Container Trains between its terminals and the gateway ports of Pipavav and Mundra with suitable Hubbing enroute. The double stack trains are already providing cost-effective transportation between these ports and ICD's in Northern India. With the imminent coming of Western Dedicated Freight Corridor within near future, using high rise OHE wires and adjusting/altering other fixed structures on P-way, double stack trains will be run elsewhere also. CONCOR looks at this as the most exciting opportunity and is reading for it by way of developing Rail Transshipment Hubs at suitable locations. It will also be entering into MOUs with other CTOs for consolidating large movements and minimize the operating costs, which will correct the rail road mix of freight traffic for Indian economy, hence reducing carbon emissions. It will also forge special relations with some of the leading players in the container transport field for transporting their containers between ports and ICD's on an agency basis.
CONCOR has already been operating the Air Cargo business having two components, of Air Cargo handling in its select terminals and organizing Bonded Trucking Services. Company arranges bonded trucking services between its ICD's and major international airports like Mumbai, Bangalore, Amritsar and Delhi. Company is expanding these services to/from other locations by linking Airports with hinterland Customs clearance. Air Cargo Complex at HAL, Ozar Airport, Nasik has commenced operations. Centre for perishable cargo for handling of EXIM perishable cargo at Goa International Airport is also operational. Plans are in advanced stage for setting up of more cargo handling facilities within some of the existing ICD's. In the meanwhile, the company is also targeting International Airports and as a preliminary step, has set up CONCOR Air Ltd as a 100% subsidiary which has taken over both International and Domestic Air Cargo operations in Mumbai. This company has been a grand success within first year of its complete operations, and will expand its scope in very near future.
In the Cold Chain business, the company is seriously contemplating some restructuring of its wholly owned subsidiary Fresh & Healthy Enterprises which has established its presence in the Apple trade in North India & its first Controlled Atmosphere Store(CAS). Company is also focusing on opening smaller facilities at wantage locations, as a part of "Farm to Table" Logistics Strategy, at places like Nasik & Delhi (Naya Azadpur). It has also developed special ventilated containers for facilitating perishable cargoes to move on rails without corresponding refrigeration facilities. CONCOR's special reefer trains today form a vital part of infrastructure, providing global linkages with ICD's like Kanpur, Dadri & ports like JN Port, Pipavav & Mundra.
For domestic business, CONCOR is committed to bring back to rail a significant share of containerisable general goods cargo through aggressive marketing efforts. The main competition in this area comes from road transportation of goods by trucks. However, since we provide better risk coverage, in addition to controlled transit times and overall reliability, we feel we are geared to woo traffic that presently uses road. Domestic business has a very large potential for growth today. Given that consumption centres are vast distances away from production points, there will always be a big demand for transport. The setting up of high capacity consumer goods industries also indicates that the growth of non-bulk traffic is expected to be faster than that of bulk traffic, with the shares of both becoming decidedly better. Significantly most of this non-bulk traffic is containerisable, and represents a huge market potential for CONCOR in the domestic sector. The main strategy to capture domestic traffic so far has been to run regular scheduled point-to-point services by rail. These services will be expanded to several more origin-destination (O-D) points. Greater efficiency will be introduced through the use of BLC/BLL and other suitable redesigned rolling stock in accordance with SFTO/AFTO policies. Special cargo and corporate will get particular focus by customization of services, and a wider terminal network will be put in place.
A major aspect of the growth strategy for both international and domestic business will involve optimizing the internal logistics chains within the organization. In the effort to move from being a service integrator, CONCOR has already moved towards becoming a Third Party Logistics(3PL) service provider by expanding the core business into areas such as warehousing, refrigerated cargo storage and movement, and the provision of a large number of other value added services. CONCOR has already formed a JV Company with Transport Corporation of India to focus on securing door-to-door contracts of corporates by way of reverse auctions and operate specific contracts for them to target meeting their end-to-end logistic requirements.
As part of the overall strategy to increase market share, CONCOR will also look to provide multi-modal, transportation and logistics consultancy services to its potential users. These could be shippers directly, or intermediate agencies such as shipping lines, forwarding agents, terminals operators etc. Even government bodies and private trade associations chamber of commerce etc. may be targeted as potential clients.
CONCOR also hopes to avail the benefits of upcoming GST policy of Govt. of India and existing Private Freight Terminal (PFT) policy of India Railways and establish Multi Modal Logistics Parks (MMLP) at strategic locations with the help of State Governments and trade bodies for which process has already been initiated. This will help CONCOR to be a significant player in all newly planned industrial satellites likely to emerge across the highly potential corridors like DMIC (Delhi-Mumbai Industrial Corridor) & AKIC (Amritsar-Kolkata Industrial Corridor), likely to be developed alongside Eastern & Western Dedicated Freight Corridors (W & EDFC), emerging as the final game changer in logistics in India.