Gateway Distriparks aims to capture volume from CONCOR’s flagship ICD

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Apr 16, 2023

Gateway Distriparks aims to capture volume from CONCOR’s flagship ICD

NEW DELHI : Gateway Distriparks Ltd, is aiming to steadily increase its

NEW DELHI : Gateway Distriparks Ltd, is aiming to steadily increase its market share by leveraging its two key Inland Container Depots located just outside Delhi. The Delhi-National Capital Region is an important market for export-import and domestic cargo and one of country's premier private logistics and container train operator.

The company's strategy is to target volumes from Tughlakabad ICD located in southeast Delhi, the largest in India and operated by competitor and industry heavyweight, state-owned Container Corporation of India (CONCOR).

"If you look at ICD (Tughlakabad) which is inside Delhi, we also have plans to target their volumes, since there is a problem in taking cargo inside and outside of Delhi. So the customers are looking for options outside Delhi and we have that first mover advantage that outside Delhi we have two terminals, one in Gurgaon (Gurugram), one in Faridabad, so that give a lot of benefit to the customers," said Rajguru Singh Behgal, President, Rail-Vertical, Gateway Distriparks Ltd.

The company currently undertakes double stack container trains operations from its flagship ICD located in Garhi Harsaru, Gurugram and is planning to undertake the same from its ICD located in Faridabad, which will help improve volume uptake.

Gateway Distriparks is banking on one disadvantage that Tughlakabad ICD faces. Heavy commercial vehicles entering Delhi need to pay environmental compensation charges. Entry of commercial vehicles into the capital city is also restricted during the busy hours of the day and permitted only at around midnight.

Behgal highlighted that the services provided by Gateway Distriparks from its two ICDs located outside Delhi, will enable customers to have cargo movement all through the day and there will be no environmental tax applicable, giving them a cost advantage.

"We are already having a market share of 17% (Delhi-NCR). So this market is very important to us because if you talk about the industry, the auto industry is there…then we have garment exporters. So what we are looking at is huge size of 1 lakh TEUs per month, which is happening, and we are planning to increase our market share," said Behgal.

CONCOR, currently has a dominating role in container train operations with above 60% market share in domestic rail container movement. The company's ICD in Tughlakabad, is India's biggest dry port, handling about 300,000 TEUs (twenty-foot equivalent unit) annually.

Gateway Distriparks’ strategy could very well work out. According to a recent report by brokerage firm ICICI Securities, dated May 21, CONCOR is losing its market share mainly in the western market (Mundra) and the Delhi-NCR market.

"It (CONCOR) is losing its market share due to the competition's pricing strategy as well as competition from the road transport segment," the report stated.

Gateway Distriparks’ ICD in Gurugram is a 90 acre facility with an installed capacity of 250,000 TEUs. The company's other ICDs in North India includes Ludhiana, Kashipur, Faridabad and is expected to commission Jaipur ICD in the current financial year.

"…lot of new investments which is coming near NCR, that is coming around our terminals. If you look at one of our biggest customers like Maruti, so they are coming up with a new plant which is very close to our facility. Then there are areas which are closer to our facilities near Neemrana, Bhiwadi-Bawal and Manesar, the new investments are coming in," said Behgal.

Currently, the company's portfolio includes five container freight stations and five rail-linked ICDs and another ICD at Jaipur is under construction. Post that the company plans to make two more ICDs, which will connect the north-west corridor and will be located in north or central India.

"We are looking to expand in an ICD vertical. We just completed the acquisition of Kashipur, we are building Jaipur…we are looking at UP, Rajasthan and central India as key areas where we want to expand," said Ishaan Gupta, Joint Managing Director, Gateway Distriparks.

Expansion of cold storage facilities and dry warehousing assets are also planned, added Gupta.

In December 2021, Indian Railways unveiled the Gati Shakti Terminal Policy, which aims to promote development of rail cargo terminals and increase railways share of freight to 45% from 27% by 2030.

The policy allows private as well state-owned operators to set up common user facilities or terminals for handling rail cargo.

The policy has two components, development of common user facilities on private land or land owned by the railways. The management of Gateway Distriparks highlighted that as a full-fledged container train operator, there remains limited business potential for setting up common user terminals at railway land, wherein the operator will not have ownership of the terminal yard and the same will be a common user facility for other operators as well.

Not having exclusivity for terminal use and train operations will result in limited potential for operators such as Gateway Distriparks as they derive 70% of the revenue from train operations.

"On the railway land if you build it, you have to make it a common user terminal, which means anyone can bring their train and you cannot say no if they pay that nominal train access charge. For us 70% of our revenue of a container is on the rail transportation side, so we don't want to be in just the ICD business…the returns do not justify the investment. So we would rather hope that someone else moves in and builds these Gati Shakti Terminals on railway land and we will take our trains there and work on that model," said Samvid Gupta, Joint Managing Director, Gateway Distriparks.

Gateway Distriparks Ltd, Inland Container Depots Tughlakabad ICD Container Corporation of India (CONCOR). Rajguru Singh Behgal, President, Rail-Vertical, Gateway Distriparks Ltd. Currently, the company's portfolio includes five container freight stations and five rail-linked ICDs and another ICD at Jaipur is under construction. Post that the company plans to make two more ICDs, which will connect the north-west corridor and will be located in north or central India. Ishaan Gupta, Joint Managing Director, Gateway Distriparks. Gati Shakti Terminal Policy, Samvid Gupta, Joint Managing Director, Gateway Distriparks.