Global container trade volumes have undergone a slight 2% year-on-year decrease from April to May 2023, with a positive 2% year-on-year increase from June onwards. There is notable growth in the volumes of India’s major ports and containers. Railway and container volumes have also displayed a 1% year-on-year rise, with a hint of reduced momentum in the rail coefficient.
The year 2023 showed the ongoing expansion of organized players’ market share driven by GST related factors and a surge in activity along the Dedicated Freight Corridor (DFC). Companies like Concor, Delhivery, and TCI Express show a trend towards further growth and expansion.
Improved Rail Coefficient
With the Western Dedicated Freight Corridor (DFC) gaining traction, the rail coefficient is expected to improve. In June 2023, there was a slight uptick of only 0.5% year-on-year in the volume of major ports in India. Container volumes experienced a notable decline of 7% year-on-year.
However, this decline was counterbalanced by increased iron ore and fertilizer volumes, which helped mitigate the slowdown in other sectors. Ports in Tamil Nadu played a prominent role in the regional volume decrease, both in June 2023 and the April-June period.
The overall rail volumes witnessed a 2% year-on-year decrease, with container volumes registering a significant 10% year-on-year drop in June. There is an optimistic outlook for rail volumes, as the Gujarat Ports-Dadri stretch of the Dedicated Freight Corridor (DFC) commenced its operations in April-May 2023. This development is expected to contribute to a forthcoming increase in rail volumes.
New Dedicated Freight Corridors in The Pipeline
The Western Dedicated Freight Corridor (WDFC) has been activated, establishing a link between Gujarat Ports and Dadri, located in Uttar Pradesh, in the inland region of India. The completion of the segment spanning from a station 100 km away from Jawaharlal Nehru Port Trust in Navi Mumbai to Dadri is anticipated by December 2023. The ultimate 100 km section is slated for operational status by the conclusion of Calendar Year 2024.
As for the Eastern Dedicated Freight Corridor (EDFC), a significant 900 km out of 1,856 km has already been brought into full functionality, with the remaining portion projected for finalization by December 2023.
Concerted endeavours are underway to expand unconventional methods of freight transportation. The Dedicated Freight Corridors will upgrade time and cost efficiency, which is expected to aid businesses in curbing inventory days and bolstering dependability. Elaborate project reports are presently under submission to the Ministry to propose further additions to the Dedicated Freight Corridor network.