Concor - future plans

The container traffic in India has grown at a CAGR of 15% since 1991, 2.5 times the average GDP in the same period. With the growth of external trade being faster than GDP, the similar trends are expected to continue in future as well. Similarly the possibilities of growth in container traffic in the Domestic sector are immense with continued strong trends in growth of GDP and the need of the industry for value added services. Logistics ports, large cargo hubs will be the requirement of the industry in very near future, as large retail chains generate the demand for professional managed cargo delivery systems.

There will be a need for CONCOR to adopt different strategies for growth in the changed external business environment due to opening up of Rail sector for container train operation for 14 other players. More emphasis will be required on providing total logistics and transport solutions to its customers by seeing the possibilities of expanding the presence of the company in all the segments of the transport value chain in the Exim as well as Domestic segment. Possibilities are to be explored for strategic alliances, both for optimal utilization of infrastructure as well as expansion into other segments of the value chain.

The emergence of number of new ports viz. Mundra, Pipavav, Vizag, Tuticorin, Vallarpadam & 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.

Rail remains the main stay of CONCOR's transportation plans, currently. Business trends are now changing towards more and more door-to-door clearances. This needs to provide single window clearance facilities to its customers. This will require close co-ordination and/or alliances with other relevant agencies and transport intermediaries for door-to-door movement of cargo in containers. 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 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.

Due to the presence of OHE wires and other fixed structures on P-way, double stack trains cannot be run elsewhere. CONCOR has also drawn MOUs with some of the leading players in the container transport field for transporting their containers between ports and ICDs.

CONCOR has created a special division to look after the Air Cargo business which has two components 1) Bonded Trucking Services and 2) Air Cargo Complexes. Company arranges bonded trucking services between its ICD's and major international airports like Mumbai, Bangalore, Hyderabad, Amritsar, Chennai and Delhi. Company is expanding these services to/from other locations. Air Cargo Complex at HAL, Bangalore Airport offers all cargo related services. The other Air Cargo Complexes is nearing completion at Ozar airport, Nasik. Plans are also being worked out for other airports. CONCOR has joint venture with MSIL and HAL in Air Cargo Complexes.

The Joint Venture with M/s. MAERSK A/S Coperhagen for third birth at JN Port has placed CONCOR in the category of Port terminals operators. CONCOR has also entered in a JV with Dubai Port World for setting up & managing container terminal at Cochin Port. This has opened new possibilities for further expansion in this field.

CONCOR's wholly owned subsidiary Fresh & Healthy Enterprises has established its presence in the Apple trade in North India & its first Controlled Atmosphere Store(CAS) at Rai near Sonepat(Harayana) will be shortly available for use.

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 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 then that of bulk traffic, with the shares of both becoming decidedly better than the current 35-65 ratio. 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 CONTRACK services will be expanded to several more origin-destination (O-D) points. Greater efficiency will be introduced through the use of newly acquired rolling stock. 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 the employment of the 'hub and spoke' system to serve the customer completely at his doorstep, while optimizing the internal logistics chains within the organization. In the effort to move from being a service integrator, CONCOR will move 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.

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.