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Market leader Container Corporation of India Ltd (Concor) is seeking to disrupt the container logistics market by offering 45-day free storage period to exporters and importers at its facilities handling EXIM containers.
From September 1, India’s biggest rail hauler of containers started offering 45 days free storage period to import/direct port delivery (DPD) loaded containers, export/direct port entry (DPE) loaded containers and 90 days for empty containers across its 46 EXIM terminals.
46 terminals re-designated
After the free storage period, Concor will levy uniform terminal service charges (TSC) per day at all EXIM terminals depending upon its category.
For levying TSC, Concor has re-designated its 46 EXIM terminals into four categories – six in category A, which includes its flagship Tughlakhabad inland container depot (ICD) and Dadri ICD, 11 in Category B, 9 in Category C and 20 in Category D.
In Category A terminals, the TSC has been set at ₹2,000 per import loaded twenty-foot equivalent units (TEUs) per day while empty TEUs will attract ₹1,000 per day.
The TSC for Category B terminals will be ₹1,500 per loaded TEU per day and ₹750 per TEU per day for empty containers.
In Category C, the TSC will be ₹1,000 for a loaded TEU per day and ₹500 for an empty TEU per day.
In category D, the TSC will be ₹750 for a loaded TEU and ₹375 for an empty TEU, according to a trade notice issued by Concor. BusinessLine has reviewed a copy.
Concor will not levy TSC at four terminals under ‘Other category’, the notice said.
Prior to the notification, Concor was offering free days ranging from 5 to 7 days depending on the type of EXIM containers and the TSC after the free storage days was levied slab wise.
“We are taking the fight to the rival camp. This will be a game changer,” said a Concor official. Private ICDs were giving competition to Concor by offering many freebies. “With the customers now benefiting from a longer free storage period, they will again think of coming to us instead of going to private ICDs,” he added.
“This will disrupt the trade,” said an official heading a private container freight station near Jawaharlal Nehru Port Trust. “When a longer free storage period is given, customers would not like to use any ICDs which has maximum seven days free period after which charges will kick in,” he said.
May hit private ICDs
Concor’s move will have a substantial impact on private ICDs.
One more thing that will happen subsequent to this decision is customers will start using Concor facilities as temporary warehouses, he said.
With shipping line detention typically lasting 14 days and importers still evacuating their DPD boxes via CFS, Concor will now offer customers its containers to de-stuff the material on paying de-stuffing charges after which they can keep the cargo at Concor’s facilities free of cost for as much as 45 days, the CFS official said.
“45 days is a very long period. By that time, customers should clear the cargo, thus obviating the need to pay storage charges at all,” the Concor official said.
ICDs earn most of their money from escalating storage charges after the free period.
“If the storage charges becomes nil, there is hardly any margins on handling charges alone,” he said, adding that private ICDs closer to Concor’s Tughlakhabad and Dadri facilities will be impacted by the Concor decision.
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