How cargo transport can be improved (Indian Railways)
Heavy Load: A freight train moving near Tuticorin port.
By connecting two or three open coaches to all popular trains, ensuring their timely movement and changing fare regulations, Indian Railways will be able to load a reasonable amount of general freight with large tonnage in the coming years.
This is the latest in a three-part series on Indian Railways,(cargo) capital expenditure and freight business.
In this article, we will analyze the bulk and general cargo transportation of Indian Railways (IR). In 2018-19, before the Covid-19 pandemic, IR transported 62 million tonnes of general cargo, including 45 metric tonnes of general cargo, 12 metric tonnes of domestic containers and 5 metric tonnes of parcels, with a combined total of Rs 8,247 crore. The average profit per ton is INR 1,339 for goods and INR 3,384 for parcels. However, the total freight tonnage is lower than what a study by the Indian Railway Economic and Technical Services (RITES) in 2008 predicted over the next 10 years: between 194 and 292 tons depending on the effort.
Necessity of abandoning parcel ships
The current IR strategy for general cargo transportation is two-pronged: parcels are transported by passenger trains or special heavy parcel vessels (VPH). However, these methods appear to be becoming a problem as loads of charter parcel trucks and full parcel ships have decreased by 15% and 8% respectively.
One of the reasons for the decline of the parcel industry is the rise in shipping rates. Analysis of 15 origin-destination pairs shows that premium (P) and Rajdhani (R) fares, after including first- and last-mile costs, are higher than truck fares, that is, excluding freight to destinations in the Northeast. Other factors include inadequate terminals, inconsistent demand, as well as excessive criminal penalties, unreliable transit times, complex booking and delivery mechanisms, and self-imposed environmental restrictions. VPH parcel trains have proven to be counterproductive and should be abandoned. A properly covered dolly (technically a heavy-duty air brake dolly (BCNHL)) carries 700% more payload and 45% more mass. Even if we cut the P scale rate in half, the resulting revenue would be 3.5 times the amount of VPH.
Another big hope for IR is the expected push for general cargo transportation by private container ship operators (CTOs) through container shipping. However, after 15 years of privatization, domestic containerized goods account for only 1% of IR goods and 0.3% of the total national transportation. High shipping rates are one reason for the inefficiency. The problem may also lie in the risks associated with the development of the market, as it will inevitably lead to losses over time. Moreover, maintaining a growing market is also difficult because predatory pricing by other major technology managers can weaken the market.
The way forward
General loads are divided into three types: high-time-sensitive (HTSG), medium-time-sensitive (MTSG), and non-time-sensitive (LTSG).
HTSG goods are essentially valuable or perishable goods that need to continue to be transported by passenger ships. Connecting two or three cars to all popular trains would easily double the parcel capacity, and these parcel cars could carry five times more revenue than sleeping cars and about twice as much air-conditioned cars.
MTSG and LTSG loads are rate sensitive and must be transported at IR freight rates, which are lower than truck rates. Even after adding first and last mile costs, freight forwarders still have a cost advantage. But the problem is that the ship must be fully loaded. Freight companies should be allowed to reserve individual cars capable of running trains on schedule even when the train is not fully loaded. Ensuring timely movement will certainly attract shipping companies to international relations. Managing these freight trains does not require a change in policy, just a change in thinking. It is necessary to change the customs tariff regulations by adding any freight charges (FAK) for rolling stock to the tariff table. Return of the cart should be encouraged.
To encourage volumetric loading, speed can also be regulated by increasing the plate speed based on the quantity loaded. Finally, IR should incentivize freight aggregators by changing the current policies of freight forwarders. In the longer term, new types of locomotives will also be needed to improve loads and speeds, which IR and the rolling stock industry are fully capable of designing and delivering. Opportunities have been missed in the past. But now, with more coordinated efforts, IR will be able to transport a significant amount of general cargo tonnage in the coming years. Sudhanshu Mani is Vande Bharat Project Leader and Independent Railway Consultant, M. Ravibabu is a founding member of Anekdhara, a public policy portal.
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