Hub and Spoke Services
One of the areas in which CONCOR faces competition in the transportation of goods is from truck operators offering transportation by road. Competition with such operators is primarily on the basis of price and dependability. The Company believes that it competes favorably with road transportation on the basis of price on movement of heavier cargoes over longer distances, although the truck operators may offer, among other things, greater flexibility with respect to the timing of shipments. Volvo trucks, with vastly reduced transit times as compared to conventional trucks, are challenging the rail transit times of CONCOR and are set to heighten competition.
In order to take full advantage of the rail linkages offered, while at the same time offering the reach and dependability of road services, the concept of "hub and spoke" operations are likely to become crucial in the company's long term development. Hub and Spoke operations are feasible for both the international and domestic business segments. Such operations involve the linking of road or short lead rail shuttle services within defined catchment areas, to long lead point to point train services.
In the international domain, some hubs like Tughlakabad are fed by several satellite locations like Panipat or even Gwalior, until traffic justifies running a scheduled service from the satellite itself, as was done in the case of Ludhiana and Moradabad, both of which started out as remote locations linked to the hub terminal at Tughlakabad, but now function as stand alone terminals.
Competition in the field of container handling is increasing, especially in the metropolitan ports. Several companies have started operations in ports. In the deep hinterland, other operators have entered the market in the sense that new terminals have been set up. However, as CONCOR concentrates on its hub-spoke strategy, these developments can become complementary to CONCOR's operations, as our competitors in the CFS business often become customers for transport of containers from and to gateway ports.
In the domestic arena as well, hub and spoke movements allow for a better utilization of transport potential and allow for long lead services to be generated on the basis of short lead traffic collections using road and rail shuttle services. This service can be especially useful for big corporates for whom production centers are concentrated in a single location, but distribution needs are national in scale. CONCOR has already successfully moved white cement as a commodity using this experiment, whereby the product has been distributed over various locations after being picked up from a single production center.
HUB & SPOKE
Transportation to become seamless and "door-to-door"