Adani & NYK Auto join hands for rail logistics JV
Adani Logistics, a subsidiary of Adani Ports and Special Economic Zone (APSEZ) and NYK Auto Logistics (India) have joined hands for transporting finished vehicles. The joint venture will use automobile freight trains to strengthen their finished vehicles transportation service network.
The two companies concluded an agreement for establishing the JV. "This partnership allows us to strengthen inland capabilities with a reliable association by focusing on quality & visibility in the supply chain," Naotaka Ishizawa, managing director, NYK Auto Logistics (India), said.
The automobile sector is witnessing a rapid growth. Loading activity has increased 16 per cent in 2017-18, a statement from Adani Logistics said. This growth, coupled with the government's focus on promoting alternative means of transportation to reduce carbon footprint, and increasing demand of transporting vehicles through rail mode, is gaining traction, the statement added.
"This formidable association combines the strengths of individual parent companies, putting the JV in a unique position, utilising these readily available assets and expertise to deliver an end-toend value driven, asset and service based, supplychain solutions to the automobile industry in India," said Karan Adani, chief executive officer, APSEZ.
The JV firm will adhere to the automobile freight train operator (AFTO) policy of the ministry of railways for transporting vehicles across India. The policy was liberalised to encourage private investment in special wagons and procurement of our own highcapacity railway wagons, among others.
According to experts, the two companies would be required to invest in the upgradation of infrastructure and buying of specialised wagons for the purpose.
It is expected that finished vehicles distribution through the rail mode will grow faster than the industry's growth rate, the statement said. Accordingly, the firm is planning to commence operation with six Automobile Freight Trains and based on market trends, it would have 25 such trains in operations in three years.