Europe model to make bulk car transport cheaper

Europe model to make bulk car transport cheaper
S Kalyana Ramanathan / London February 06, 2009

An existing European rail transportation solution is on its way to India that could well see bulk transporters on Indian Railways, which would see car makers cutting their transportation cost to a fourth of what it is now.

Coventry-based advanced engineering and rail logistics solution provider Focal Ltd, along with AFR of France and KK Birla Group company Texmaco Ltd, is proposing to deliver a new two-tier wagon to the Indian Railways on a turnkey basis. This comes with a patented wagon from AFR and a backhaul trolley (BHT) patented by Focal to be used on the railway network.

From an average of 125 cars being moved in single shipment (assumed at 11 wagons per train), the new solution promises to move as many as 400 small cars at a time. This, of course, will be done using a two-tier wagon that is a common feature for car makers in Europe and other advanced markets.

Focal’s chief executive Rod Hilditch said that the three partners in the new deal would soon sign a joint venture agreement where Texmaco will manufacture these wagons fitted with Focal’s BHT to be supplied to Indian Railways.

Hilditch said that the design of the new wagon, though commonly used in Europe now, would need the approval of the Research Designs and Standards Organisation, Lucknow. If approved by RDSO, commercial production of the new wagon is expected to start by the first quarter of calendar year 2010.

Hilditch said that nearly 24,000 such wagons are already in use in Europe and estimates that the initial target is to deliver around 5,000 wagons for the railways. The cost of making these wagons is also expected to be much lower in India at £180,000 (Rs 1.28 crore) each, against £250,000 if made in Europe. He also estimates that for a well rail-networked country like India, the demand could be as much as 50,000 wagons in the long run, which roughly translates to £1 billion worth of business.

The new design could also decongest the roads as heavy cargo like cars and automobile parts can now move on the railway network. At present, most automobile manufacturers prefer to move both inbound and outbound cargo by road. Moving cargo by rail is also considered more environment-friendly. Moving a tonne of cargo over one kilometre by road would roughly translate to an emission of 177.8 grams of carbon, while it would be around 21.7 grams when moved by rail, Hilditch said, quoting prevalent norms in Europe.

Leading car makers in India like Maruti Suzuki along with industry body SIAM is already working with Indian Railways to develop auto wagons which again would be double-decker with a capacity to carry 270 cars per rake, said a company official.

The new wagons, apart from moving finished cars from factories to various dealer outlets in cities across the country, will also be a major cost-saver for major car exporters like Hyundai and Maruti Suzuki.

Hilditch said while car makers were obvious users for these wagons, these can be used by other bulk movers in the food and retail sector.