The rail unit of logistics firm Gateway Distriparks will start a fourth rail-linked cargo terminal by the end of 2009 as it seeks to improve its efficiency, a senior official said.

The additional terminal will help Gateway Rail increase its fill factor, or the utilisation of its container wagons, beyond the current 78 percent, Sachin Bhanushali, president of Gateway Rail Freight Ltd, told Reuters in an interview on Monday.

"As the number of terminals increase, the network benefit is bound to result into improvement in the fill factors," Bhanushali said. "The plan is to go up to a network of eight to 10 terminals all over India."

Gateway Rail and other peers are looking to seize market share from truck firms to capitalise on the cost-effectiveness of railway transport, especially with firms who want cheaper and more efficient alternatives in a slowing economy.

Its fourth terminal in the north Indian city of Faridabad will cost the firm 350 million rupees over two years, of which 150 million will be spent by March 2010, he said, declining to give details on when the remaining terminals will be added.

The Faridabad investment will be funded through two rupee-denominated lines of credit, he said. Gateway already has terminals in Ludhiana, Mumbai and Garhi.

Gateway Rail, a fully-owned unit of Gateway Distriparks, transports goods like steel, chemicals, paper, meat and grains through containers on railroads. A fifth of its business comes from overseas trade while the rest is from domestic cargo.

The company currently runs 19 trains and may add some more, although Bhanushali declined to give details.

"We have orders for about six trains," he said. "The delivery depends essentially on how the markets behave."

Gateway Distriparks has spent 6 billion rupees on the rail freight business and will spend another 4 billion. It is in discussions with private equity firms for funds for expansion, Bhanushali said, but nothing concrete had come up yet.

STEADY GROWTH SEEN

There was steady growth in domestic haulage, Bhanushali said, expecting to end the fiscal year in March with transported volumes of 65,000 twenty-feet equivalents and a revenue of 1.75 billion rupees.India's economy expanded at 5.3 percent, the slowest in six years, compared with 9 percent or more in the last three years. Exports fell for the fourth straight month in January, and industrial output is showing signs of shrinking.

But there were no indications traffic and rates would decline on the slowdown, he
 said."Forward looking - I think it is steady state. The amount of nervousness we see in discussions has not translated into contraction in demand at the industry level."
Jasudha Kirpalani and C.J. Kuncheria

Gateway Rail freight transportation services in Punjab
Ludhiana | Friday, Jan 9 2009 IST

Gateway Rail Freight Ltd, a subsidiary of Gateway Distriparks Ltd has opened Punjab's first private rail linked Logistics Park at Sanehwal near Dhandari Kalan in the district.

Gateway Rail was opened on December 19 last year.

This rail linked Logistics Park is spread over 50 acres of land and has a two line rail siding to handle inter modal transporation of exim and domestic containers. Punjab has a huge unmet demand for rail based container transporation on both domestic and international routes. The present facilitues are being supplemented by Delhi based container terminals resulting into higher overall transaction cost for the customers.

Ludhiana, Dhandari, Mandi, Jalandhar, Barnala and Amritsar are the major markets in Punjab and Ludhiana is the ideal hub for providing inter-model service to all these locations. There are four private CFS operating out of Ludhiana. The Gateway Rail terminal would provided excellent rail connectivity for these CFS.

Gateway Rail has plans to provide regular services for the western ports of the country from Punjab. It also plans to operate regular services between the iron and steel producing states of West Bengal, Orissa, Jharkhand and Bihar and Punjab.

This terminal had been notified by Northern Railway as open for container trains and the first six trains of Gateway Rail for Sanehwal are already on the run and are expected to deliver the domestic cargo in Punjab during this week.

This makes Gateway Rail the only private container train operator of Indian railways to have three terminals in India at Garhi Harsaru (near Gurgaon in NCR), Kalamboll (in Navi Mumbai) and Sanehwal.

Gateway Rail operates 12 trains, the largest fleet amongst the private operators, and provides end-to end- service through its inhouse fleet of 235 trailers. Gateway Rail has shown resilience and has modified its transprot product during the economic slowdown and has kept its trains running with cargo.