AVG Logistics to operate Chennai-Guwahati parcel express train

AVG Logistics has secured a six-year contract, valued at ₹105 crore, for the lease of a parcel cargo express train (PCET) from the Indian Railways.

"This special train connects Korukkupet goods shed (Chennai) to New Guwahati goods shed (Guwahati), will complete four trips every month over the next six years, totalling 313 trips during the contract tenure. The carrying capacity during the trip is expected to be 364 tonnes for the first six months. Later, it will be 484 tonnes per trip. The express train service will cover the distance of 2,500 kilometres in 72 hours ensuring seamless connectivity between the two locations," says a release issued by AVG to the stock exchanges.

Sanjay Gupta, Managing Director & CEO, AVG Logistics says: “We are excited about our new collaboration with Indian Railways. This collaboration highlights our strong commitment to improving cargo transportation services, bringing us nearer to our sustainability goals and increasing the proportion of green (eco-friendly) logistics in our revenue stream. Generating ₹105 crore revenue from this contract enhances our financial standing and helps us fuel our ambition to undertake more ambitious projects, thereby elevating our overall financial performance. Through this contract, while departure of the train from Chennai to Guwahati, the company will serve the industries in the field of tyres, hosiery, garments, FMCG, incenses etc, and during the departure of the train from Guwahati to Chennai, the company will serve the industries in the field of tea, bamboo, plastic granules, mosquito repellent, FMCG, Hair oil etc.

"We believe that this strategic move and committed services will have a positive impact on our operational efficiency, service reliability, and overall business growth. The long-term nature of this contract underscores our commitment to achieving sustained excellence in logistics services. We look forward to the rest of the year with renewed vigour, excited to create value for the company, stakeholders, and the environment."

The stock, however, did not move much today and closed at Rs 612.45, down 1.42 percent on the BSE.

For the third quarter ended December 31, 2023, AVG reported a net profit of Rs 4.8 crore on total income of Rs 125 crore.

Indian Railways has inked similar deals with DTDC Express, DRTC Logistics, DOT Express, Patel Roadways, V-Trans and FastDespatch Logistics, The New Indian Express reported.

"The scheme, called Parcel Cargo Express Train, was introduced in 2020, and promoted as an alternative to booking an entire goods cabin. Companies, such as cement makers and miners, sign long-term agreements with Indian Railways to operate dedicated Cement Express trains between their manufacturing plants and major markets and distribution centres.

"However, the PCET scheme is different in two respects - it is given high priority in traffic and moves like an express passenger train. The train also has designated stops from where goods can be loaded and unloaded by the logistics company. This allows logistics companies to adhere to strict timelines for the delivery of their goods."