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Allcargo Logistics Ltd is weighing a potential entry into container terminal operation business to tap synergies with the container freight stations (CFS) and inland container depots (ICD) the firm runs across India, a top official has said.
“Some of the strategic objectives that we could explore would be whether it would make sense to get into container terminal operations,” Ravi Jakhar, Chief Strategy Officer, Allcargo Logistics, told BusinessLine.
This does not include greenfield port development as those are infrastructure projects but if there are opportunities for container terminals, we could look at it, Jakhar said.
Explaining the rationale behind the move, Jakhar said: “From a strategic point of view, container terminals could be a potential area of synergy with CFS/ICD business”. He, however, added that the firm “does not have active investment plans on the drawing board”.
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Allcargo Logistic runs container freight stations at Jawaharlal Nehru Port Trust (JNPT), Chennai, Mundra and Kolkata ports (that drives more than 80 per cent of India’s container traffic) and an inland container depot in Dadri, Uttar Pradesh with a combined capacity to handle over one million twenty-foot equivalent units (TEUs).
A greenfield ICD is also coming up at Jhajjar in Haryana.
CFS/ICD business
The firm, led by Shashi Kiran Shetty, is looking to further expand the CFS/ICD business though acquisition of asset light facilities.
In August, Allcargo Logistics acquired 85 per cent stake in Speedy Multimodes Ltd, the entity that runs a container freight station each in JNPT and Mundra Port, in a bid to expand its CFS business. The 68-acre CFS of Speedy (located some 6 km away from the port) is owned by JNPT but was given to a private firm on an O&M contract for 20 years beginning January 1, 2006. The Speedy Multimodes CFS at Mundra is on lease from Central Warehousing Corporation (CWC).
With the acquisition of the Speedy Multimodes, Allcargo has two CFSs each servicing JNPT and Mundra Port. “JNPT is a key market for us. We have strong presence there, so it does make strategic sense for us to look at container terminal operations. It is something that is worth evaluating,” Jakhar said.
Allcargo also has an upcoming warehouse in the Nhava Sheva region where JNPT is located. “We believe there could be opportunities for a warehousing-cum-CFS kind of solution for the customers. Lots of customers who are into importing might also benefit from JNPT as a warehousing location,” Jakhar added.
It is also evaluating key locations on western and eastern dedicated freight corridors for setting up private freight terminals/ICDs on PPP basis.