Adani will use ICD at Kila Raipur to serve Ludhiana trade
Adani Logistics Services Private Limited, a unit of Adani Logistics Ltd, will shut its inland container depot (ICD) at Kanech in Punjab’s Ludhiana district from June 25, in a first clear sign that a steep fall in export-import (EXIM) container volumes due to the pandemic has started to hurt dry port operators.
The Ludhiana market generates a throughput of about 25,000 twenty-foot equivalent units (TEUs) a month.
“In the same catchment area of Ludhiana, there are seven ICD’s including CONCOR and GatewayRail Freight, serving a market of this size and those volumes are even further down due to the pandemic,” said a container industry consultant.
“What will happen is with the pandemic hitting the industries and trade, some ICD’s will be closed going forward. People thought that economy will continue to grow at a big pace, so they said if not in two years, then in 3/4/5 years they will start making money. But with the outbreak of COVID, all those projections have been pushed back by at least 2/3 years. That is the reality which will start hitting a lot of people. That would be the basic reason behind the closure of ICD Kanech,” he added.
The ICD at Kanech came under Adani’s fold after it acquired Innovative B2B Logistics Solutions Pvt Ltd from private equity firm True North for an enterprise value of ₹331 crore in March last year.
In a public notice, Adani Logistics Services informed its customers that it will stop accepting EXIM cargo at the Kanech ICD from June 25. The company also said that it will be applying for the de-notification of the custodianship under Section 45(1) of Customs Act.
Adani Group (Logistics Division) said it will continue to serve Ludhiana trade through another fully functional facility – ICD Kila Raipur – and urged customers to plan their EXIM shipments accordingly.
A big player like Adani closing down an ICD brings out the kind of stress on the bottom line of all the dry ports in the country due to the impact of COVID, the consultant mentioned earlier said. Adani Logistics may convert the ICD, which has a rail siding, into a private freight terminal/purely domestic terminal or a warehouse.
“Why should Adani run two ICDs to serve Ludhiana area, incurring huge costs. When volumes are not there, it doesn’t make sense,” the consultant added.
