Subject: Proposal for rebate/reduction from various charges and VDS to

M/s Maersk Shipping at GFCJ

Reference: Request of M/s Maersk vide email dated 11.10.22 (CP-17)

In reference to above subject, It is to be kind noted that M/s Maersk Shipping is the exclusive
customer for EXIM business at GFCJ terminal. The customer books empty containers from
IDBR to GFCJ and loaded containers with material of M/s Vedanta Aluminium i.e. aluminium
ingots/billets/bars from GFCJ to VZP in 20’ containers with cargo weight of 27 MT.

This was a regular movement of M/s Maersk with an average traffic of 4-5 rakes per month.
The volumes for said movement in last six months are as under:

Table: A
Export Loaded Volumes of Maersk in FY-22-23
Stream Month (TEUs) Rakes
Apr'22 258 3
May'22 428 5
June'22 436 5
GFCJ-VZP
July'22 350 4
Aug'22 432 5
Sept'22 0 0
Total in 6 months 1904 22
Average/month 317 4

Since, Customer hadn’t offered any traffic in last month, i.e. Sept’22. The reasons for the
same has been asked by the terminal. M/s Maersk advised that they are not able to offer
competitive rates to Vedanta Aluminium for said movement and requested CONCOR for
exemption and reduction of various charges to resume the traffic on said stream, i.e. GFCJ-
VZP. Customer has committed to offer a volume of 5 rakes on exemption of additional charges
and resumption of earlier volume discount scheme (Maersk mail attached at CP-17).

The overall current margins for said movement is as under:

Table B:
MAERK MOVEMENT EX. IDBR-GFCJ-VZP
Gross Weight (MT) upto 26 MT 26-31 MT
Margin Margin
Charge Head Tariff Payout Margin Tariff Payout Margin
% %
₹ ₹ ₹ ₹
Rail Freight ex.GFCJ-VZP ₹ 4,657 24% ₹ 4,681 22%
19,400 14,743 21,000 16,319
Terminal Infra Charge (TIC) ₹ 1,000 ₹0 ₹ 1,000 100% ₹ 1,000 ₹0 ₹ 1,000 100%
Equipment Imbalance (EIC) ₹ 1,000 ₹0 ₹ 1,000 100% ₹ 1,000 ₹0 ₹ 1,000 100%
Handling Charges-Empty ₹ 2,150 ₹ 1,475 ₹ 675 31% ₹ 2,150 ₹ 1,475 ₹ 675 31%
Handling Charges-Loaded ₹ 3,500 ₹ 1,475 ₹ 2,025 58% ₹ 3,500 ₹ 1,475 ₹ 2,025 58%
Documentation Charges ₹ 1,500 ₹0 ₹ 1,500 100% ₹ 1,500 ₹0 ₹ 1,500 100%
Customs charges ₹ 1,000 ₹ 889 ₹ 111 11% ₹ 1,000 ₹ 889 ₹ 111 11%
Saving in differential rail ₹ ₹
₹ 9,339 ₹ 5,392 37% ₹ 9,339 ₹ 5,392 37%
haulage ex.IDBR (table E) 14,731 14,731
₹ ₹ ₹ ₹ ₹ ₹
TOTAL 37% 36%
44,281 27,921 16,360 45,881 29,497 16,384

*Note: Calculation for Pay-Out of Rail freight and Terminal handling Charges is as
under:

Table C:
Sl. RAIL FREIGHT COSTING FOR MAERK MOVEMENT EX. IDBR-GFCJ-VZP
Cost Head/Gross Weight (MT) upto 26 MT 26-31 MT
 A Rail Distance IDBR-GFCJ (in km) 885 885
B Empty Rail Haulage IDBR-GFCJ per TEU ₹0 ₹0
C Rail Distance GFCJ-VZP (in km) 562 562
D Loaded Rail Haulage GFCJ-VZP per TEU ₹ 12,960 ₹ 14,461
E Devlopment Surcharge on total rail haulage per TEU ₹ 648 ₹ 723
F Overhead Costs per TEU (1.9 times of loaded distance) ₹ 1,068 ₹ 1,068
G Break Van Cost per TEU ₹ 67 ₹ 67
H Total Rail Freight Costing per TEU (B+D+E+F+G) ₹ 14,743 ₹ 16,319

Table D:
PAYOUT FOR HANDLING CHARGES AT GFCJ
A Payout to Handling Contractor per month (fixed hiring model) ₹ 10,29,000
B Payout of LLF to IDCO in FY 21-22 ₹ 30,30,447
C Payout of LLF to IDCO per month (B/12) ₹ 2,52,537
D Payout of LLF to Railways for FY 21-22 ₹ 5,50,066
E Payout of LLF to Railways per month (D/12) ₹ 45,838.83
F Total Payout for handling & land per month (A+C+E) ₹ 13,27,376
Total Handling of containers per month (TEUs) (assuming volumes : EXP LD:
G
4 rakes , DSO I/W LD: 1 rake) 900
H Total Pay-out for Terminal Handling Charges per TEU (F/G) ₹ 1,475

PAYOUT FOR CUSTOM CHARGES AT GFCJ

A Customs Cost Recovery for the period Jul'22 to Sept'22 ₹ 19,21,238
B Customs Cost Recovery per month ₹ 6,40,412.6
Total Handling of containers per month (TEUs) (assuming EXIM volumes : EXP
C LD: 4 rakes) 720
D Total Pay-out for Custom Charges per TEU ₹ 889

Table: E
There is a movement of M/s Maersk ex. CCJS to IDBR. In this movement, CONCOR collects
Rail freight for OWL-OWE i.e. loaded freight ex. CCJS-IDBR and empty freight ex. IDBR-CCJS
from M/s Maersk. If these containers are brought to GFCJ for GFCJ-VZP movement, then there
will be a saving in rail haulage payable to Railways.
COST SAVING IN DIFFERENTIAL RAIL HAULAGE FOR EMPTY MOVENT EX.IDBR
A Rail Distance IDBR-CCJS (in km) 1433
B Empty Rail Haulage IDBR-CCJS per TEU ₹ 14,731
C Rail Distance IDBR-GFCJ (in km) 885
D Empty Rail Haulage IDBR-GFCJ per TEU ₹ 9,339
E Difference in Empty Rail Haulage per TEU ₹ 5,392

Table: F
Sl. RAIL FREIGHT COSTING FOR MAERK MOVEMENT EX. VZP-MAVB-VZP
26-31
Cost Head/Gross Weight (MT) upto 26 MT MT
A Rail Distance VZP-MAVB (in km) 559 559
B Empty Rail Haulage VZP-MAVB per TEU ₹ 6,396 ₹ 6,396
C Rail Distance MAVB-VZP (in km) 559 559
D Loaded Rail Haulage MAVB-VZP per TEU ₹ 12,960 ₹ 14,461
E Development Surcharge on total rail haulage per TEU ₹ 968 ₹ 1,043
F Overhead Costs per TEU (1.9 times of loaded distance) ₹ 1,062 ₹ 1,062
G Break Van Cost per TEU ₹ 67 ₹ 67
₹
H Total Rail Freight Costing per TEU EX. VZP-MAVB-VZP ₹ 21,453 23,029
I Rail freight Tariff VZP-MAVB (Empty) ₹ 7,860 ₹ 7,860
J Rail freight Tariff MAVB-VZP (Loaded) ₹ 18,640 ₹ 20,240
 ₹
K
Total Rail freight Tariff EX. VZP-MAVB-VZP ₹ 26,500 28,100
L Margins ₹ 5,047 ₹ 5,071
M Margin % 19% 18%

As seen in above table B, The overall existing margins are Rs. 16,360/- and Rs.16,384/- in 26
MT and 31 MT weight slabs respectively. Hence, there is a scope of reduction to gain volumes
of export loaded movement from the terminal.

M/s Maersk vide email placed at CP-17, has requested for following reduction/exemption of
charges for this movement.

1. Exemption from Terminal Infrastructure Charges of Rs.1,000/-

2. Exemption from Equipment Imbalance Charges of Rs.1,000/-
3. Reduction in Empty Handling Charges by at least 25%
4. Reduction in Loaded Handling Charges by at least 25%
5. Reduction in documentation charges from Rs.1,500/- to Rs.500/- per TEU
6. Resumption of earlier VDS of Rs.2000/- per TEU above 200 TEUs per month
7. Exemption from Customs Charges of Rs.1,000/-

Accordingly, terminal has worked out on margins after considering the request of the customer
for above exemptions and reductions. The proposed tariff and proposed margins are as under:

Table D:
MAERSK MOVEMENT EX. GFCJ-VZP
Gross Weight (MT) upto 26 MT 26-31 MT
Current Proposed Proposed Margin Current Proposed Proposed Margin
Charge Head Payout Payout
Collection Collection Margin % Collection Collection Margin %
Rail Freight ex.GFCJ- ₹ ₹
₹ 19,400 ₹ 19,400 ₹ 4,657 24% ₹ 21,000 ₹ 21,000 ₹ 4,681 22%
VZP 14,743 16,319
Handling Charges-
₹ 2,150 ₹ 1,750 ₹ 1,475 ₹ 275 16% ₹ 2,150 ₹ 1,750 ₹ 1,475 ₹ 275 16%
Empty
Handling Charges-
₹ 3,500 ₹ 2,000 ₹ 1,475 ₹ 525 26% ₹ 3,500 ₹ 2,000 ₹ 1,475 ₹ 525 26%
Loaded
Customs charges ₹ 1,000 ₹ 1,000 ₹ 889 ₹ 111 11% ₹ 1,000 ₹ 1,000 ₹ 889 ₹ 111 11%
Terminal Infra Charge
₹ 1,000 ₹ 1,000 ₹0 ₹ 1,000 100% ₹ 1,000 ₹ 1,000 ₹0 ₹ 1,000 100%
(TIC)
Equipment Imbalance
₹ 1,000 ₹ 1,000 ₹0 ₹ 1,000 100% ₹ 1,000 ₹ 1,000 ₹0 ₹ 1,000 100%
(EIC)
Documentation
₹ 1,500 ₹0 ₹0 ₹0 #DIV/0! ₹ 1,500 ₹0 ₹0 ₹0 #DIV/0!
Charges
Saving in differential
₹ 5,392 #DIV/0! ₹ 5,392 #DIV/0!
Haulage (Table E)
₹ ₹
OVERALL TOTAL ₹ 29,550 ₹ 26,150 ₹ 12,960 50% ₹ 31,150 ₹ 27,750 ₹ 12,984 47%
18,582 20,158

Proposed VDS ₹ 2,000 ₹ 2,000

Proposed volume for
VDS (TEUs) 360 360
Margin per TEU after
VDS ₹ 10,960 ₹ 10,984
Margin % after VDS 42% 40%
Total Earnings after
VDS ₹ 39,45,600 ₹ 39,54,240
*Note: Assuming volumes of 4 rakes against Maersk’ commitment of 5 rakes (Mail at CP-17).

If above proposed exemption in Documentation Charges, reductions in Handling Charges and

VDS of Rs. 2,000/-are approved by CA, then we still have margins of Rs. 10,960/- and Rs.
10,984/- per TEU in 26 MT and 31 MT weight slabs respectively.

Also, GFCJ will have net earnings of Rs.39 lakh approx. after giving the said reductions and
VDS to the customer.
As mentioned above, this is the traffic of M/s Vedanta Aluminium. Currently the traffic is
catered from Vedanta Siding. As seen in above table F, the current margin ex. VZP-MAVB-VZP
is Rs. 5,000/- approx. If this traffic diverted to GFCJ after approval of proposed
reductions/exemptions and VDS, then GFCJ will still have margins of Rs. 11,000/- approx.
Hence, we have surplus margin of Rs. 6,000/- in IDBR-GFCJ-VZP in comparison to VZP-MAVB-
VZP. Also, diversion of traffic from MAVB to GFCJ will result in reduction of turnaround time
of rakes and smooth operations.
In view of above, terminal is proposing following exemptions/reductions in charges for the
movement of Export loaded containers ex. IDBR-GFCJ to VZP for a period of six
months:

1. Reduction in Terminal Handling Charges for loaded container from Rs.3,500/- to Rs.
2,000/- per TEU with proposed margin of 26%
2. Reduction in Terminal Handling Charges for Empty container from Rs. 2,150/- to Rs.
1,750/- per TEU with proposed margin of 16%
3. Exemption in documentation charges of Rs.1,500/- per TEU
4. VDS of Rs. 2,000/- per TEU on and above 360 TEUs per month

Area-Head/Area-4 is the Competent Authority for reduction in terminal handling charges

subject to minimum margin of 15%. Hence, the file may be forwarded to Area-Head/Area-4
for kind approval of Sl. 1 & 2.

Since, exemption from documentation charges and providing VDS is a policy matter and
Directors are the Competent Authority for changes in policy; hence, the file may be forwarded
to Director (IM & O) for kind approval of Sl. 3 & 4.

Submitted for kind perusal and further submission to C/A at Corporate Office for kind approval,
please.