CONCOR & INLAND CONTAINER DEPOTS

Concor – The Multimodal Logistics Professionals• Eversince Globalization transformed the

transportation sector… National boundaries have become permeable to penetration by TRADE Thus creating the need for flexible transport solutions.

• Malcolm McLean’s idea of containerisation changed the face of TRADE!!!

A brief background•  It was in 1981 that the first ISO container was

moved inland by the Indian Railways to India's first Inland Container Depot (ICD) at Bangaluru.

• Expansion of the network to 7 ICDs by 1988 saw increase in the handling of containers.

• Along the way, a strong view emerged that there was a need to set up a separate pro-active organization for promoting and managing the growth of containerization in India.

Then came Concor• Container Corporation of India Ltd. (CONCOR), was

incorporated in March 1988 under the Companies Act, and commenced operation from November 1989 taking over the existing network of 7 ICDs from the Indian Railways.

• It is now an undisputed market leader having the largest network of 59 ICDs/CFSs in India.

• It has and will continue to play the role of promoting containerization of India by virtue of its modern rail wagon fleet, customer friendly commercial practices and extensively used Information Technology.

• The company developed multimodal logistics support for India’s International and Domestic containerization and trade.

Core Business

Carrier : • CONCOR benefits from a close relationship with the

Indian Railways. Several of its terminals are situated on leased Railway-land

• Majority of CONCOR terminals are rail-linked, with rail as the main carrier

Terminal Operator• CONCOR's terminals provide a spectrum of facilities in

terms of warehousing, container parking, repair facilities, and even office complexes.

Warehouse Operator• The key value it offers is the provision of a single-

window facility co-ordinating with all the different agencies.

Capabilities• Technical Capability/ResourcesHandling EquipmentWagonsInfoTech

• Customer SatisfactionEfforts to improve our business processed toprovide for improved quality of customersatisfaction.

Future Plans• CONCOR plans to adopt different strategiesfor growth in the changed external businessEnvironment.• Emphasis will be required on providing totallogistics and transport solutions to its customersby seeing the possibilities of expanding thepresence of the company in all the segments of thetransport value chain in the Exim as well asDomestic segment.

What the MD has to say… 

WE ARE COMMITTED TO PROVIDERELIABLE, RESPONSIVE, SAFE AND VALUE

ADDEDLOGISTIC SERVICES

IN A COST EFFECTIVE & CONSISTENT MANNERUSING LATEST INNOVATIONS

TO ENSURE COMPLETECUSTOMER CONVENIENCE & SATISFACTION

ANDVALUE FOR MONEY

THROUGHCONTINUAL IMPROVEMENT

OF OURQUALITY MANAGEMENT SYSTEMS AND

PROCESSES Dated: 12-02-2010

(Anil Gupta)    Managing Director   

Inland container depots Understanding the Operations

Let’s understand ICD• An Inland Container Depot is a facility offering

services for:• Handling and temporary storage of import/export laden

and empty containers.

• Customs Control and Clearance Procedures

• Warehousing

• Transshipment

ICD Vs CFSTwo Basic Differences:

•An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports. CFS, on the other hand, is an off dock facility located near the servicing ports

•Transfer of goods to a CFS is akin to transfer from one area of a Customer station to another. However for an ICD, its considered as transfer from one customs station to another.

Functions of ICD:• The primary functions of ICD/CFS may be summed

up as under:

• Receipt and dispatch/delivery of cargo.• Stuffing and stripping of containers.• Transit operations by rail/road to and from serving ports.• Customs clearance. • Temporary storage of cargo and containers.• Reworking of containers.• Maintenance and repair of container units.

Operations at Icd• The operations of the ICDs/CFSs revolve

around the following centers of activity:-

• Rail Siding (in case of a rail based terminal)

• Container Yard

•Warehouse

•Gate Complex

Benefits of ICD• Concentration points for long distance cargoes and its

unitization.• Service as a transit facility.• Customs clearance facility available near the centers

of production and consumption• Reduced level of demurrage and pilferage.• No Customs required at gateway ports.• Issuance of through bill of lading by shipping lines,

thereby resuming full liability of shipments.• Competitive transport cost.• Reduced inventory cost.• Increased trade flows.

Procedure for approval of ICD and its implementation

3)The applicant should also send a separate copy of the application to the jurisdictional Commissioner of Customs. Send his comments to the Ministry of Commerce and the Central Board of Excise & Customs (CBEC) within 30 days.

Port Authority would furnish their comments within 30 days to the Ministry of Surface Transport and the Ministry of

Commerce.

2)Application 10 copies in enclosed form should be submitted .

Division in the Ministry of Commerce, Udyog Bhavan, New Delhi. 10 copies of feasibility reports

1) Proposals for setting up ICD will be considered and cleared, on merits, by an Inter Ministerial Committee for

ICDs

Ministries of Commerce, Finance (Department of Revenue)

Railways and Shipping, State Governments

Procedure for approval of ICD and its implementation(Cont.)

6) Acceptance of proposal

Letter of Intent Initiate steps to create infrastructure

5)On receipt of the proposal, the Ministry of Commerce would take action to obtain the comments from the jurisdictional Commissioner of Customs and other concerned agencies within 30 days.

Zonal Railway Manager IMC Members

4) Familiarize with the statutory Custom requirements.

Transit Bond, Security Insurance

Cost recovery charges payable

Procedure for approval of ICD and its implementation(Cont.)

9)Put up the required infrastructure, meet the security standards of the jurisdictional Commissioner of Customs.

Bank guaranteed bond to Customs Customs clearance

8)Send quarterly progress report to Ministry of Commerce.

Electronic Hard Copy7)The applicant would be required to set up the infrastructure within one year from the date of approval.

Extension Withdraw approval

ICDs in India• ICDs are connected with gateway ports. Following are examples

of some of the ports and the ICDs connected to them.

Eg: • Port• 1.Mumbai,Jawaharlal Nehru Port Trust 

• Delhi• Ludhiana• Ahmedabad• Pune• Wadi• Bander • Banglore• Hyderabad• Tondiarpet• Coimbatore

Network of CONCOR Across INDIA

Network of CONCOR Across INDIA

• CONCOR divides its network in 8 major regions for ease of operations. These regions are Northern RegionWestern RegionEastern RegionSouthern RegionCentral RegionSouth Central RegionNorth Western RegionNorth Central Region

Northern Region• Spread across major Indian states like Punjab, Haryana,

Uttar Pradesh, Rajasthan and parts of Madhya Pradesh.• The area is rich in agriculture and industrial

development, and provides a natural concentration of both demand and supply for both international trade as well as domestic traffic.

• As much as 40% of CONCOR’s throughput and revenues are contributed by this region. CONCOR has 14 terminals in the region.

• located at Delhi (Tughlakabad),Dhandari Kalan(Ludhiana), Moradabad, Kanakpura(Jaipur), Bhagat ki Kothi(Jodhpur), Domestic Terminal(Okhla, New Delhi), Dhappar, Phillaur, Rewari, Sonipat, Kharia, Gotan, Panipat, and Ballabhgarh.

Northern Region (Cont.)• Connected to major ports like JNPT, NSICT and

MBPT via high speed freight trains and road.• Also connected to major cities in India like

Mumbai, Chennai, Bengaluru and Kolkata via road and rail transport.

Western Region• The rail container terminals JNPT, NSICT and MBPT

at account for more than 90% of the entire export import traffic that is handled by CONCOR's major hinterland terminals. These gateway ports of Mumbai are served by CONCOR's Western region, and this makes it the crucial link in the Exim logistics chain for the company.

• Connected to Mumbai ports by railway link. As many as 15 direct trains run between the region and the port, connecting the port to Delhi, Ludhiana, Mulund, Ahmedabad, Hyderabad, Nagpur, Jodhpur, Aurangabad, Vadodara, Moradabad etc.

EASTERN REGION• It is headquartered in Kolkata with jurisdiction over the

major eastern states of Bihar, Jharkhanad, parts of Madhya Pradesh, West Bengal, Orissa and entire north eastern states.

• The region is the eastern gateway for CONCOR, connecting the ports of Haldia, Kolkata and Vizag & Paradip with the hinterland network. The majority of EXIM traffic in the region is handled at the port side terminals of Haldia and CONCOR Terminal KoPT Coal Dock Road(CTKR).

• Amingaon near Guwahati is the Inland Container Depot in the region, functioning almost exclusively for the handling of tea exports. Export of steel consignments is also dealt with through the Inland Container Depot at Tatanagar.

• Also CONCOR ICD is connected to cities like Delhi, Ahmedabad, Chennai, Nagpur, Raipur etc. to take care of domestic consumption.

SOUTHERN REGION• This region was created after taking over 7 Indian railway ICDs.• The Southern Region has its headquarters (the Regional Office)

at Chennai and covers the States of Kerala, Tamilnadu, parts of Andhra Pradesh, Karnataka and Union Territory of Pondicherry. The Region is proud to be a truly multi-modal facilitator in that it handles cargo by Road, Rail, Air and via the coastal shipping route.

• Due to the short leads of traffic owing to the geography of the area, the region has concentrated heavily on developing both rail and road services, and providing value added services especially in the area of warehousing, LCL movements, air cargo etc.

• Has connectivity with Chennai Port, Cochin Port and has network of ICDs covering the southern Indian states.

CENTRAL REGION• The Central region was set up with the commissioning of the ICD

at Nagpur. Located at the geographical center of the country, Nagpur is the natural logistics hub for the Indian Sub-continent for movement of International and Domestic cargo. The "Zero Mile" at Nagpur is not merely a geographical reality, but is becoming the focal point of logistics infrastructure. It is the converging point of the nations’ railway and road network linking a vast hinterland.

• CONCOR's Inland Container Depot at Nagpur is linked by rail to the east-west and north-south trunk rail routes making it possible to run trains from and to all parts of India. It is also well connected by the Ring Road to the National High Way No 6. (Mumbai to Calcutta) and National High Way No 7 (Varanasi to Kanyakumari). The distance of ICD Nagpur from various ports and other ICDs within the country is within the range of 750 to 1250 kms for almost all major consumption and industrial centers.

CENTRAL REGION(CONT.)• The ICD at Nagpur caters to a large hinterland covering most parts of

Madhya Pradesh and Maharashtra. The "Service Area" of the ICD includes the industrial areas located at Yavatmal, Wardha, Butibori, Hingna, Mouda, Bhandara, Kalmeshwar, Raipur, Bhilai, Chindwada, Saunsar, and the Rice Mills dotting Madhya Pradesh and Maharashtra. In the area of domestic business Nagpur is already moving direct scheduled services to major cities in all directions.

• The ICD at Nagpur caters to a large hinterland covering most parts of Madhya Pradesh and Maharashtra. The "Service Area" of the ICD includes the industrial areas located at Yavatmal, Wardha, Butibori, Hingna, Mouda, Bhandara, Kalmeshwar, Raipur, Bhilai, Chindwada, Saunsar, and the Rice Mills dotting Madhya Pradesh and Maharashtra. In the area of domestic business Nagpur is already moving direct scheduled services to major cities in all directions.

• The ICD at Aurangabad caters to the industrial areas of Waluj, Chikalathana, Paithan, Jalna and Shendra in an around the Mumbai-Aurangabad highway. The facility has now been rail connected, with JNPT and the potential of using it as a domestic terminal with scheduled services to cities like Delhi, Kolkata, Bangalore, Ahmedabad, Chennai and Mumbai is being explored.

SOUTH CENTRAL REGION• The Region is headquartered at Hyderabad, and

caters primarily to the requirements of the State of Andhra Pradesh and Karnataka. Domestic Region is rapidly developing as an industrial centre for the country. In addition to three full-fledged ICDs, the Region also caters to domestic traffic at various locations like Bellary, Munirabad, Balanagar, Srikakulam etc.

• The flagship ICD is located at Secunderabad, which caters to the industrial hinterland of the capital city of Hyderabad. The second facility exists in Vizag catering to the Hinterland of Visakhapatnam Port.

• All these facilities are inter connected through road networks.

NORTH WESTERN REGION• North western Region has its headquarters at Ahmedabad , and caters

primarily to the industrially rich hinterland of the state of Gujarat . The region is also expected to take the lead in development of Container Traffic for the upcoming ports at Pipavav, and Mundra and the existing port of Kandla. The terminal network of the region consists of the flagship ICD Sabarmati (Ahmedabad) along with terminals at Vadodara, Gandhidham and Ankleshwar There is port Side terminals at Kandla, Mundra ,and Pipavav and a major domestic hub at Khodiyarv on the outskirts of Ahmedabad.

• The ICD is located near the Ahmedabad –Mumbai National Highway , and is connected by rail directly to Mumbai .Daily express train services between the ICD and Mumbai with transits under 24 hours have made this a vibrant and rapidly growing facility. For domestic cargo movements ,Ahmedabad is a major source of traffic for locations such as Kanpur, Delhi, Agra , Patna, Hyderabad,Belgaum, Bangalore , Kolkata ,Chennai, Salem, Cochin, cuttack, Tata Nagar etc. These services are provided from Domestic Container Department at Khodiyar.

NORTH CENTRAL REGION• North Central Region has the Headquarters at

Sec-18, Noida( opp. Sec-18, Noida Metro Station). It has the second Maga ICD named as ICD/Dadri is fully functional( EXIM & Domestic) located at Greater Noida(UP)- near Dadri Railway Station.

• Connected to major cities and ports through the gateway of Delhi.

CLAIMS PROCEDURE

Claims Procedure

Claims for loss and damages are in accordance with Indian Railways Act, 1989.

Damages due to Act of God Act of war Act of Public Enemies Orders or restrictions imposed by Government. Act of omission or negligence by any of the parties. Natural deterioration Latent Defects Fire Explosion and unforeseen risksare not covered.

Liability of CONCOR

• Calculated on the basis of Invoice Value

• Varies from 0.25 % to 1 % of the value depending on the distance for which the consignment is booked.

• Liability never exceeds Rs. 50 per Kg while the goods are in the custody of CONCOR.

The claims should be made within 6 months from the date of booking for getting timely settlement.

Claims should be addressed to Head of the region where the destination depot lies.

Format for Claim Letter

• Copy of Inland Way Bill

• Booking Station

• Destination Station

• Factory Stuffing

• Factory De-stuffing

• Commodity Description

• Details of loss or damage

• Shortage Certificate issued by Concor at time of delivery.

• Amount claimed

Hazardous Commodities Transportation of Hazardous cargo on containers by rails are subjected to the statutory provisions of IRCS Red tariff.

Packing and stuffing being as per specifications of the International Maritime Dangerous Goods code (IMDG).

Procedure Followed

Concor accepts a Hazardous Commodity only when the rail booking is done on a PINK forwarding note.

No restriction on acceptance on non hazardous commodities.

If commodities are not referred either in IRCA Red Tariffs or IRCA Goods Tariff or IMDG code, then such containers are only accepted after taking a specific undertaking from the shipping line.

Schedules

Concor has subdivided India in several regions :

Northern Region

Eastern Region

Southern region

Central region

South Central Region

Frequency

The frequency of the the transit is as follows :

Daily

Weekly

3 per week

even once or twice the month

Special Highlight :

There is on demand transit service also which is also available on the basis of the units that are available for transit.

Customs Clearance

1. Bill of Entry – It is also known as Shipment Bill is presented to custom house.

Has to file four copies: Original and duplicate for customs Third for the importer Fourth for the Bank.

Various other documents are also deposited with it.

2. Amendments of Bill of Entry – Mistakes are noticed followed by the amendments with approval of Deputy/ Assistant Commissioner.

3. Green Channel Facility – Facility given to some major importers. Clearance of goods is made without routine examination.

4. Payment of Duty – Import duty is paid in the designated banks through TR – 6 challans.

5. Prior Entry for shipping bill – For faster clearance of the goods, provision has been made in Sec 46 of the act to allow filing of the bill of entry prior to the arrival of the goods.

6. Specialised schemes – Import of goods under specialised scheme such as DEEC and EOU etc is required to execute bonds with authorities.

CONCOR SWOT- Analysis

Strengths

1. Concor is the major player among rail operators. .With more than 200 trains and 61 terminals, Concor has built a strong infrastructure giving it a competitive edge over its peers in the industry.It is the major player in India moving containerized cargo by rail. It operates Container Freight Stations (CFS) / Inland Container Depots (ICD). Concor has a Pan India network of 61 terminals which facilitates access to different players in the logistics chain like customs, railways, ports and road transporters. The company also organizes rail/road transport for domestic containers and provides consultancy in the field of multi-modal transport.

CONCOR has introduced movement of Double Stack Container Trains between Kanakpura(Jaipur) & Pipavav and Kankakpura & Mundra. These trains will provide cost-effective transportation between these ports and ICDs in Northern India

2. Concor enjoys a tax benefit under section 80 IA and accordingly effective the tax rate for the company is around 21-22%. Concor gains this benefit for infrastructure development by building CFS & ICDs. In union budget 2010, government has announced investment linked tax incentives for companies investing in cold chain warehouse and Concor is already into cold chain logistics from FY07. Therefore will enjoy tax incentive on future investment in this segment.

Concor has a cash balance of Rs 1,907 crore as on July 2010. Cash and bank balance accounts for more than 40% of Concor’s total assets.Thus, Concor had an edge over others with no debt in its books. Concor has huge cash reserve which helps them fund their future capex plans without raising debt.

The emergence of number of new ports viz. Mundra, Pipavav, Vizag, Tuticorin, Vallarpadam , Ennore& some minor ports in Gujrat like Porbandar, Okha, Maroli etc. will have a large effect on the hinterland movement of containers in the country. Further, the hinterland penetration levels of the container traffic, which are very low at present, are also bound to see a 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.

Indian railways have planned to build dedicated rail freight corridors (DRFC) which will exclusively cater to freight trains. These corridors will greatly improve the freight transportation across India.These corridors will greatly improve the freight transportation across India leading to faster development of the country.  Exclusively for running freight trains at speed upto 100 kmph Ensure guaranteed transit time thus provide quicker and reliable service Accelerated industrial development in the region around the DRFC Improving the moving dimensions for the use of double stack containers. Presently single stack containers are used Increasing the train length from 700 meters to 1500 meters Increasing the train load capacity from 4000 ton to 15000 ton Both corridors will be constructed simultaneously. The corridors are expected to be fully operational over their entire length by 2017.

OPPURTUNITIES

Shipping lines such as APL and Maersk and terminal operators such as DP World have entered the business of running container trains. Concor will do the same by entering the container shipping business. It has also proposed to open offices abroad as part of the integration strategy. This will help them to capture volumes right from the point of origin. It would also compensate for the volume loss due to entry of shipping companies into container rail business.

Weakness Concor’s key terminal at Tughlakabad contributes around 19% to the total volume with 100% concentration on Exim traffic. Top 5 terminals(Tughalakabad, Dadri, Ludhiana, Sabarmati and Dronagiri) also dedicatedly contribute 43% to the core Exim business. Top 20 terminals handle 83% of total volumes. So the balance 65% of terminals handled only 17% of the total volumes. Consequently there is large portion of capacity not being optimally utilized

Threats Opening up of rail transport for private players in FY07 has brought an end to Concor’s monopoly.

Entry of private players in FY07 has slowed down Concor’s exim volume growth.The Private players have an aggressive rollout strategy ofacquiring rakes and ICDs to be deployed on the Exim and Domestic routes and currently have70 rakes and 4 ICDs. 

Competition from truck operators 

Concor faces high competition from truck operators offering transportation by road. Road transport has market share of 68% in total container traffic.

After losing its monopoly in rail logistics, Concor will also have to grab market share from road transport operators.

Competition with truck operators is primarily on the basis of last mile connectivity and dependability.

Concor competes favorably with road transport operators on heavy cargo and long distance routes.

Volvo trucks, with highly reduced transit times as compared to conventional trucks, are challenging the rail transit times of Concor. Considering the competition from truck operators, Concor has entered into a tactical partnership with Transport Corporation of India (largest player in road transport), which would aid improving its performance in road segment.

Higher haulage charges render Concor uncompetitive in FEU Segment

Generally, the mix of containers in Rail has been 50:50 with respect to forty foot equivalent unit (FEU) and twenty foot equivalent unit (TEU). Light weight cargo is generally transported via FEU wherein IR charges 2x the haulage charges of TEU. This has rendered Rail uncompetitive as Road offers tonnage-based tariffs.