NYK Auto Logistics India (NALI) has signed an agreement with transport and port operations provider, Adani Logistics, to provide finished vehicle services using freight trains.
The NYK division already provides integrated services for carmakers in India that include road-based inland delivery between plants, dealers and ports, as well as pre-delivery inspection. Adani offers integrated port processing and rail services for the finished vehicle sector across the country as part of the wider Adani Ports and SEZ parent company.
Together NALI and Adani Logistics are aiming to meet the increased demand for domestic distribution of vehicles in the country as production volume grows and said they intend to do so using rail, offering greater multimodal choice to carmakers across India’s vast distances and lessening the impact on the environment.
The impact of the Central Motor Vehicle Rules (CMVR) regulation, which was introduced in 2016 and limits the length of road-based car carrier equipment, also means that an alternative mode is necessary to take the pressure off capacity constraints now impacting the 15,000-plus car transporter fleet in the country.
Indian light vehicle sales are expected to climb to 4.1m units this year and as much as 5.3m by 2021, according to data from analyst IHS Markit. By then India could be the third largest car market in the world. As outlined at last year’s Automotive Logistics India conference by IHS Markit’s Puneet Gupta, associate director for vehicle sales forecast for South Asia, carmakers are going to be using their manufacturing capacity to meet that local market demand.
[mpu_ad] Adani Logistics said that loading activity in the finished vehicle sector increased by 16% between 2017 and this year and, in response, the joint venture is planning to start operations with six finished vehicle carrying trains. Based on market trends, the company aims to grow that to 25 in three years.
It also said the joint venture would be part of the Automobile Freight Train Operator (AFTO) scheme established by the Ministry of Railways, which is designed to allow private operators to manage their own fleets of rail wagons. It also said it would be offering its automobile freight trains for transporting vehicles across India in a more efficient manner that would contribute towards a “green India”.
Karan Adani, CEO of parent company Adani Ports and SEZ, said Adani Logistics’ strength lay in rail operations and having a network of multi-modal logistics parks that worked closely with the ports network.
“This formidable association combines the strengths of individual parent companies, putting the JV in a very unique position, utilising these readily available assets and expertise, to deliver an end-to-end value driven, asset and service based, supply chain solutions, to the automobile industry in India,” he said. “This new company marks yet another milestone in our strategic efforts to explore opportunities in rail transportation by auto wagons in designated territory in India.”
