‘We Establish CONCOR Ahead of the Market’
V.Kalyana Rama, the Chairman & Managing Director of Container Corporation of India Limited (CONCOR) is not only instrumental in development of container depots in many important regions of CONCOR but also has been involved in all the developmental planning and operational activities of EXIM and Domestic cargo at many of its dry port terminals. A trained professional in Railways and multi modal transport logistics, he has wide experience in the field of Engineering, System design, Railways & multi modal logistics operations and Project planning and commissioning. In an exclusive conversation with Swati Sharma of Governance Today, Shri Kalyana Rama speaks up more…
How CONCOR has contributed in the growth of Indian economy in last two years and what are the future plans?
Logistics is a service industry and the thumb rule here is every percentage of GDP growth will require around 1.4% growth in logistics segment for GDP growth to happen. OfCourse , GDP is growing but, may be logistics is not growing at the same pace.Like in every developed economy, tertiary sector that includes the service industry contributes more in growth of GDP than primary and secondary sectors. However, growth in these two sectors is also important asall these sectors and the related growth are interdependent and services have to be given in the primary and secondary sectors. Precisely, this is the reason our government is putting emphasis on ‘Make in India’ kind of programs.
We are an economy of 125 crores, which is a huge domestic market. Make in India is going to pick up the speed now. People will be interested to come and manufacture in India and export outside. Recently, FDI has also started growing and this shows interest of other countries in Indian economy and in Indian market. Domestic as well as EXIM movements are certainlygoing to increase.
How growth of CONCOR is proportionate to growth of market?
We try to establish ourselves ahead of the market. Today we are present at 66 locations in India and we got tie up at 3 locations. Our aim is to start 12 facilities by next FYI which is 2017-18. We are also looking at covering around 100 locations by 2020. This is good enough number to cater to Indian Logistics market. This is in addition to working out from some CRT facilities (Container Rail Terminal) and all the gateway locations where our containers are handled. We operate on demand from these facilities. With all these plans and arrangements in place, we are confident, we will be able to meet the demand.
What are the key challenges you are facing in the course of translating and implementing Prime Minister’s Digital Transport vision? Where does CONCOR stand in that?
ONCOR is quite equipped in regards to digital transport. We are having a very strong IT enabled system with us. We have got our ERP system.. I personally look after the ITes aspects of CONCOR.
Today we are looking more at Customer Value Creation. Customer Satisfaction may not be 100 per cent satisfaction. Customer Satisfaction still leaves the scope of little complacency. We may get 95per cent customer satisfaction, but customer value creation can be achieved with only 100% customer satisfaction. It may look difficult at the face, but we are trying to graduate towards that. That process requires lot of ITes.
“Our aim is to start 12 facilities by next FYI which is 201718. We are also looking at covering around 100 locations by 2020″
We are very much aligned with Digital transportation. Some of our new initiatives are coming upincluding Direct Port Delivery and faster clearances, which we are set to adapt fast. NITI Ayogexpects us to do faster clearances. So have we been able to achieve our targets with this regard, with our monitoring systems already in place.
What is the contribution of Railways, when the Ministry says that they are very much into Cargo and transport? How has that helped CONCOR to execute their planning like 100% empty container utilization?
Out of the many good initiatives of Railways, one is the Time Table freight train. It is difficult to implement because of the sectional capacity. Although Railways has got constraint of sectional capacity, these time tabled trains are run. We run trains on three routes, from Delhi to Chennai, Delhi to Bengaluru and Delhi to Hyderabad, all of which go through Balharshah. Pushing a train through that place is a nightmare in operational terms. However, we have been able to do it with railway support. Such initiatives have given confidence in railway transport among trade.
In EXIM sector, we have started time table trains from National Capital Region, from Tuglakabad and Dadri, with two of our flagship terminals through Kathuwas to Mundra. At Kathuwas we are double stacking it and then taking it to Mundra. Double stacking gives us advantage of competitive rate as well as guaranteed transit. The outcome of this is, big multinationals like Target and Wallmart, who are importing goods from India are now using trains for their exports purpose. Rail transport is environment friendly and is safe in comparison to road. They were not adopting it earlier because of the nonguaranteed transits. Once we came out with the product of guaranteed transit, it became easy for them to adopt.
We announced this service on 26 October and till date, these service are running from Dadri and Tuglakabad, without break. These all are exim cargo, for which, custom clearance is mandatory. That’s where we see success of this product. Although custom doesn’t work for seven days, still trains are running all seven days.
How road transportation system in India is helping CONCOR in covering last mile delivery services?
Ideally, there should be a mix of transport. There should be collaborative transport through Road, Train and Waterways. But unfortunately, that is not happening. All modes of transport are competing with each other for short and long leads. There is no distinction that short lead should be by road or long lead by train or else, there should be some modal shift and aggregation points. With the Dedicated Freight Corridorcoming up, we are expecting this modal shift to happen, as DFC requires huge parcel size in transit and is very competitive. But this also requires consolidations. These consolidations should happen at designated consolidation points. As of now Road is also transporting for long distances and train is transporting for shorter distances. Road is essential for transporting to last mile. Mostly, first mile and last mile transportation has to be by road only. Now, with these multi modal logistics park and DFC we are expecting that this shift should happen over a period of time and there will be better collaboration between road and train.
According to the logistics market, there is less delivery of Containers from CONCOR than the demand. What is your say in that?
We have been able to provide according to the demand. We need to assess the correctness.
There are two domain of logistics where CONCOR works, one is domestic other is EXIM. In EXIM, we have no role regarding the equipments. However, whenever there is any equipment balancing is required we certainly help. In domestic transport, there are some places where there is shortage of containers. We are willing to provide containers over there, but the issue is, in India people still compare logistics with basic transport. Logistics is much beyond mere transport. It is difficult to transport by container, if you compare cost of logistics with only cost of transport. The other anomaly is, in most cases of long distance transportation, cost of transportation is almost 3% of total product cost.But generally buyer is very sensitive about that cost and as a result, many a times, we face hard negotiations.
Are there any policy expectation from the Government to come in action which forces Road and Railways to help in empty container transportation or in using them in cargo?
“ We are very much aligned with Digital transportation. Some of our new initiatives are coming up including Direct Port Delivery and faster clearances, which we are set to adapt fast.
This cannot be done by legislation because this is the imbalance in traffic. This imbalance can be taken care by logistics operators, manufacturers, traders and consumers. To balance this, the cost of transport may increase. We can always include that in product costing. But, people are not very concerned with quality of transport rather with the cost of transportation.
Second, legislation and administration of legislation is important in controlling overweight transport on road, avoidance of unethical practices in some segments of transport. If we control them, all the idealistic things which we are talking about like collaboration in transportation, multimodal transportation, different ways of transportation depending on each other, and more, will definitely happen.
Will you give any suggestion which can help in better multimodal transportation and better services to small manufactures who are in interior areas and who don’t need full container load transportation?
We are already doing that, not only in domestic but in EXIM sector too. These are called LCL (Less than Container load). In domestic, we call it business associate policy. We appoint business associates who collect the cargo and stuff the container. However, if consolidation is not happening as it is supposed to happen, then we can’t run the train. For this, there is another initiative from railways, which is called hub and spoke model. Here, we run the train, but we bring the cargo first to hub and then deliver it to destination after consolidation. We are adopting such practices to help the small traders and manufacturers and these traders are again handled by business associates if they are having less than container load. Government policies and their administration may further help in making these better.
How will DFC change the transport scenario? What benefits do CONCOR see from DFCs?
The main problem of railways is differential speed of different types of trains. After DFC, the speed is same for all trains moving on the system, hence the movement will be faster.
Again, the average length of the train is 686 meters and that carries 90 TUs (Twenty foot equivalent unit). On DFC, length of the train will be 1500 metres. Till now double decking was allowed only on selected routes, but DFC is cleared for double stacking. Therefore the capacity of train will be of 400 TUs. In which case, we will be able to transport more in less time.
Consolidation will be easier. Road transporters will find it beneficial to consolidate at one designated place and pick up from other place. This will help in modal shift.
Are there any plans for CONCOR to expand globally?
We are looking at global markets with lot of interest. If there is any opportunity, we will expand.