APL launches private rail service in India linking Delhi to Mumbai
A joint venture between Singapore-based transportation group NOL, parent company of ocean carrier APL, and Hindustan Infrastructure Projects and Engineering on Thursday ran the first train on a new service linking New Delhi and Mumbai.
The service, called APL IndiaLinx, will integrate the steamship lines' vessel calls into Nhava Sheva port in Mumbai with scheduled freight trains the company is operating between India's capital and busiest port complex. The companies unveiled the rail service at a press conference in Delhi today.
APL is one of 15 companies that last year received licenses from the Indian government to operate private freight rail service, and the third to actually run a train. The others are Hind Terminals and JM Bakshi, which only plans on running domestic trains and don't have licenses to operate international intermodal trains.
The government's granting of licenses to private operators was intended to stoke competition with the Container Corp. of India (Concor), which until recent times enjoyed a virtual freight rail monopoly in the country.
'Concor wasn't almost a monopoly,' said Kenneth Glenn, APL president South Asia. 'They were a monopoly. These 15 fall into different categories. All don't have class I licenses (which allow operators to run international container trains out of ports and grant access to the nationwide rail network). Some are focused on the domestic network.'
The private operators paid from $2.5 million to $12.5 million for the licenses. Glenn said APL has invested roughly $60 million in trains to run the service announced Friday.
APL is banking on the benefits of tightly integrating the arrival in Mumbai of its trains from a container depot near Delhi and its containerships from foreign ports. Glenn said the company studied the average time it took to get a container from a factory in north India loaded onto a ship in Mumbai and found it was eight days. By integrating ship and train schedules and thus minimizing dwell time at the overcrowded port, Glenn said APL is confident it can knock two days off the transit time. Also helping to tighten transit times is first and last mile trucking connectivity that will be provided as part of the IndiaLinx service.
APL said it think that by being an early mover in the freight rail process in India, allied to its long history of innovation in linking freight and ocean transportation — APL was the first to introduce the double-stack train, remember — it can provide a service that the Indian market will be keen to accept.
As for how the service will be priced, Cedric Foo, APL chief financial officer, said the 'pricing will be set by the value proposition. As long as we provide value, the customer will be willing to pay for it.'
By the end of the summer, IndiaLinx will be running three trains — each with capacity for 45 TEUs. By the first quarter of 2008, that number will jump to nine, with 11 roundtrips weekly between Delhi and Mumbai possible if demand is sufficient.