CONCOR to Transport FMCG Cargo to Boost Domestic Market Share

30 Nov 2023 CW Team

To facilitate this strategy, CONCOR has introduced 12 feet high containers, addressing the "load ability constraints" associated with standard 20 feet containers. This innovation aims to reduce per-unit costs for customers. The FMCG cargo, encompassing items like televisions, washing machines, air conditioners, and refrigerators, is a significant part of India's logistics market, estimated at $102.04 billion in 2023, projected to reach $129.29 billion by 2028.

Notably, the FMCG logistics market is presently dominated by companies such as Blue Dart Express, DHL Express, FedEx, Gati, Kintetsu World Express, and Safexpress. CONCOR, recognizing the potential in this sector, has ordered 1,000 of the 12 feet high containers, with 180 already in operation and the remainder expected to commence commercial operations soon.

The decision to enter the FMCG cargo sector by rail is attributed to load ability issues. The standard 20 feet containers for FMCG cargo can accommodate only 2-3 tons, while Indian Railways charges for a minimum of 7.5 tons. To address this, CONCOR's 12 feet high containers maintain the same length and width as the standard 20 feet containers but boast a height of 12 feet. This modification increases load ability to 8-10 tons, resulting in a more cost-effective solution compared to road transport.

CONCOR has conducted successful trial runs with Coca Cola and IFB using these innovative containers. The company anticipates not only securing higher volumes but also enjoying increased profit margins. The Ministry of Railways, acknowledging the potential of these containers, has permitted their use for cargo transportation on its network, with haulage charges aligned with those notified in 2018 for different weight slabs on a per twenty-foot equivalent unit (TEU) basis.

The Container Corporation of India Ltd, a state-run navratna company, is set to transport fast-moving consumer goods (FMCG) cargo in an effort to increase its domestic market share. This move involves competing with and diverting a portion of the consumer durables business, primarily transported by road. Over the past two years, CONCOR has experienced a growth in domestic market share of approximately 25 percent. To facilitate this strategy, CONCOR has introduced 12 feet high containers, addressing the load ability constraints associated with standard 20 feet containers. This innovation aims to reduce per-unit costs for customers. The FMCG cargo, encompassing items like televisions, washing machines, air conditioners, and refrigerators, is a significant part of India's logistics market, estimated at $102.04 billion in 2023, projected to reach $129.29 billion by 2028. Notably, the FMCG logistics market is presently dominated by companies such as Blue Dart Express, DHL Express, FedEx, Gati, Kintetsu World Express, and Safexpress. CONCOR, recognizing the potential in this sector, has ordered 1,000 of the 12 feet high containers, with 180 already in operation and the remainder expected to commence commercial operations soon. The decision to enter the FMCG cargo sector by rail is attributed to load ability issues. The standard 20 feet containers for FMCG cargo can accommodate only 2-3 tons, while Indian Railways charges for a minimum of 7.5 tons. To address this, CONCOR's 12 feet high containers maintain the same length and width as the standard 20 feet containers but boast a height of 12 feet. This modification increases load ability to 8-10 tons, resulting in a more cost-effective solution compared to road transport. CONCOR has conducted successful trial runs with Coca Cola and IFB using these innovative containers. The company anticipates not only securing higher volumes but also enjoying increased profit margins. The Ministry of Railways, acknowledging the potential of these containers, has permitted their use for cargo transportation on its network, with haulage charges aligned with those notified in 2018 for different weight slabs on a per twenty-foot equivalent unit (TEU) basis.