- Dec 3, 2017
Gati-Shakti boxes, and Indian Railways’ strategy to woo more cargo
These boxes can change the way small businesses use rail transport, and can increase the revenue of the national transporter considerably.
By Mamuni Das
DECEMBER 24, 2021 / 05:44 PM IST
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Generally reach stackers are used to handle containers, but Gati Shakti boxes can be handled with cheaper equipment like forklifts. (Representational image)
As Indian Railways seeks to attract more cargo from the roads and increase its share in the total domestic-freight movement, it is considering innovations in hardware such as tweaked containers, onboarding aggregators who can put together trainloads of cargo from small and mid-sized businesses, and deepening engagement with India Post’s network of post offices.
First, specially designed containers of small size, and international-standard sized containers with higher carrying-capacity are being inducted, to help the national transporter attract goods such as two-wheelers, fast-moving consumer durables, and fly-ash, reckons the maker of such boxes. On a recent occasion, when Railway Minister Ashwini Vaishnaw stopped by at the factory of the firm that has designed these smaller boxes, he remarked that these small boxes will help small businesses.
Later, closely inspecting another avatar of the specially designed boxes for Indian conditions, stacked in threes at a container terminal along the Western dedicated freight corridor, Vaishnaw christened these tweaked boxes as Gati Shakti. Through this act, the minister linked the boxes to the government’s larger Gati Shakti vision, which includes digitisation, fast-tracking of infrastructure projects and bringing down the cost of logistics in India.
During the visit, the Minister was bullish on the business prospect of such small boxes, stating they could bring extra cargo load of hundreds of million tonnes for railways translating to revenue of tens of thousands of crore, according to an official.
The history of Gati-Shakti boxes
The small containers are designed by Kalyani Cast Tech, a New Delhi-based company floated by Naresh Kumar, a former Indian Railways officer.
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Six of these boxes can fit into a train wagon, which otherwise can carry only one international standard container of forty feet unit (FEU) or two twenty feet unit (TEU) boxes, Kumar, director, Kalyani Cast Tech, told Moneycontrol.
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For the uninitiated, globally, there are two standard-sized containers to carry cargo across countries-–TEU and FEU. Both have a gross load carrying capacity of about 30.5 tonne, which nets off to 27.5 tonne cargo payload, after subtracting the weight of container itself (3 tonne).
Currently, India has two box manufacturers – Hindustan Vacuum Glass (erstwhile DCM Shriram-Hyundai JV) and Kalyani Cast Tech. Till some years back, there were three-four more players, but they could not compete with cheaper boxes made in China and went out of business, pointed out an industry source.
The potential of these specially designed small boxes can be gauged from this instance—they can carry 40 per cent more two wheelers per train compared to what railways move in their wagons – lowering the cost of transportation for two-wheelers. Kalyani Cast Tech, which has seen interest in the smaller box from two-wheeler manufacturers, expects to start making these small boxes soon for a company that specialises in rail-based automobile transportation.
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All technical approvals are in place, said Kumar, adding that he is hoping for further clarity on charges from the Railways.
Kumar has another tweaked container–in one of the standard international sizes, but with 22 per cent more load-bearing capacity--that will enable moving flyash on the rail tracks. These strengthened containers (TEU size) will have a load-bearing capacity of 33.5 tonne instead of 27 tonne, said Kumar. He has already received an order to make 270 such containers from a newer container train operating firm that now transports fly-ash using the roads.
This new box can help Railways earn 10 per cent more revenue per trip, due to the higher weight-carrying capacity, estimated Kumar.
Kalyani Cast Tech, which has its factory in Rewari and manufactures six containers a day, is on an expansion mode, already having acquired land. “In the next four months, we will start making 15-20 containers a day,” informed Kumar, claiming that the company is already the single-largest container manufacturer in the country.
Coming back to the small boxes, these allow companies to book one-sixth of a container space, with their goods safely ensconced in the smaller, Gati Shakti box.
Currently, small businesses are unable to take full advantage of low-cost rail-transportation, since most often the businesses either have to book larger containers than needed or share a container with goods of other players. Sharing the container may mean exposing their goods before their destination points, multiple times.
Smaller Gati Shakti boxes also fit into small, pick-up trucks, so that they can travel into cities through the day. Large trucks have time limits placed on them in many cities. This is not to say that Gati Shakti boxes cannot be transported in standard large trucks, because they can be. Wherever required, upto six of these small boxes can fit onto a large truck.
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With these small Gati-Shakti containers, customers can save on real-estate costs since they needn’t book a covered terminal space, and on handling costs since the boxes can be lifted with cheaper equipment such as forklifts instead of reach-stackers. A forklift costs about Rs 8 lakh while a reach stacker costs about Rs 2.25 crore.
That said, bringing in innovations to the stubborn, globally standardised container market has proved challenging.
Intermodal boxes may fit into Indian Railways’ strategy to bring forth a solution to lower the logistics cost for small businesses and people in remote places, who do not benefit from the lower charges levied by Railways. “We are innovating big time in this area, hoping to bring a cogent solution. The innovation will involve process re-engineering, door-to-door services, transparent way of billing or charging, it will go a long way in helping these businesses,” Vaishnaw said, speaking at a CII conference recently.
Partnering with Aggregators
To take benefits of low-cost rail-transport to more small and mid-sized businesses in the country, Railways has also been thinking of onboarding more cargo aggregators.
“One thinking within the Railways is to have aggregators put together smaller chunks of goods, collecting enough load from fragmented small and mid-sized players to book a sizable share of a train,” said a second railways official.
Interestingly, the forces unleashed by the pandemic are shifting cargo transport trends globally. For instance, post pandemic, the US market saw e-commerce retailers using more of railroads and a rise in intermodal (container) usage of trains, according to a Northwestern University Transportation Centre report. This habit inculcated during the pandemic is proving to be lasting, as the trucking sector in the US battles labour shortage.
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In India too, Indian Railways has in the recent past, tried to woo e-commerce players such as Amazon, Flipkart and other retailers. After the pandemic struck, Amazon also rode the parcel trains of Indian Railways in 2020. These were separate from the parcel trains (bit like covered passenger coaches) of Indian Railways -- and not intermodal boxes.
Indian Railways is also exploring whether its older, high-capacity passenger carrying coaches which are now past their expiry date can be repurposed for carrying parcel cargo.
While the role of humble international standard-sized container in aiding world trade is well documented, its use in railways for freight movement is almost marginal. Only five per cent of cargo by weight in railways is ferried in containers. The lion’s share is carried in different types of wagons. That’s also because of the type of stuff Railways is used to carrying—steel, coal, iron, fertiliser among others.
As railways vie to grab a bigger share of finished goods such as FMCGs and consumer durables, use of containers will become more crucial, reckons a container train executive.
Railways’ deepening ties with India Post
Indian Railways is planning to rollout an innovative solution in the cargo space by the third quarter of 2022, and post offices and postmen will be a large part of that service and shifting the cargo to railways, said Ashwini Vaishnaw in a forum, a few days back.
More than any of his predecessors, Vaishnaw is uniquely positioned to deepen this relationship between Indian Railways and India Post in the cargo space as besides being the minister of railways, he is also the minister of telecommunication, and as part of that portfolio, he heads the government’s postal network. Another predecessor who had tried exploring synergies in these two spaces was Manoj Sinha.
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On its part, India Post, with its country wide network has been slowly increasing its scope to service e-commerce cargo. It has set a target to increase its parcel handling capacity to 8 lakh parcels per day from 2 lakh parcels a day, as per its annual report. For transporting and delivering packets and parcels of various sizes, India Post already uses a mix of railway and road network across the country.
However, mapping synergies between two of the world’s largest organisations—Indian Railways and India Post, may prove a game-changer in the space of cargo movement.
In fact, Kalyani Cast Tech, the maker of Gati Shakti box, is in touch with railways and India Post to proliferate the use of its innovative containers.
Containerised cargo — that comprise a small chunk of total cargo for the Indian Railways –have seen good growth this fiscal. In eight months till November this year, Railways has carried 47 million tonne (mt) of containerised cargo showing a 25 per cent higher loading compared to the corresponding period of previous year, according to Indian Railways data.
Gati-Shakti Boxes, And Indian Railways’ Strategy To Woo More Cargo