Worrying signs for rail freight goals as FY24 miscellaneous goods see fall | News

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Indian Railways has managed to improve its freight volumes each year since the Covid-19 pandemic, but its inability to add new industries and goods will pose a challenge for the national transporter to meet its ambitious goal of having a 45 per cent share in the national logistics by 2030.


According to officials in the know, the ministry of railways achieved 114 million tonnes (mt) of miscellaneous goods (classified as balance and other goods) in 2023-24 – this is 11.6 per cent lower than the previous fiscal and is the only commodity class (barring foodgrains, affected by budget and procurement) which saw a reduction over the previous year.


This comes after the national transporter was registering back-to-back double-digit growth in miscellaneous goods ever since FY21.


With industrial output and GDP growing at above 8 per cent, railways should be targeting unconventional sectors more aggressively rather than lose market share, according to experts.


“We have not been able to capture new territories. While container traffic is meant for export-import bound goods, it does not cover domestic logistics. Balance and Other Goods falling by 11 per cent means that the railways is losing share to road transport in domestic supply chains,” Lalit Changra Trivedi, former General Manager of East Central Railway, said.  


Consumer segments such as automobiles, e-commerce cargo, and dairy are moved through this segment, and the railways has been introducing various special schemes such as trucks on trains (ToT) to capture these markets are move away from its image of being only a raw materials transporter.


“Rail routes on key areas like Odisha and Chattisgarh are still congested with a capacity overutilisation of close to 130-140 per cent,” Trivedi added.


“Interest in the railway sector is probably at an all-time high, due to rising ESG compliances and monitoring of carbon emissions by corporates. But unless the railways can match road transport players in terms of making wagons immediately available the moment an order is placed, or minimising delays, it will continue to lose its share,” another former railway official said.


On its part, the railways has invested significantly in track expansion over the last four years. 5300 kilometres (km) of new tracks have been commissioned in FY 2023-24, Union railway minister Ashwini Vaishnaw said in a social media post on Tuesday. 


“Compared to 5241 km during 2022-23, average daily track laying comes out to be 14.5 km per day, which is the highest the railways has done till now,” an official said.

 

In order to increase line capacity to run more trains on existing high density routes, automatic block signalling is a cost effective solution. During 2023-24, railways upgraded 582 km with automatic signalling as compared to 530 Kms during 2022-23, the official added.


In 2022, the railways had to cancel over 1100 passenger trains to transport more coal and avert a nationwide power crisis after coal stocks reached critical levels at several power plants. 


According to Trivedi, the additional capacity being generated is being used up by the ever-increasing coal demand, which is why miscellaneous commodities and goods are not being able to benefit from the augmented infrastructure.


Coal transportation by the railways grew by over 8 per cent in FY24 to 788 mt, and is expected to continue growing at a similar pace in the near-term.

 


Vaishnaw also said that the ministry of railways has earned Rs 2.56 trillion from its freight and passenger operations in the fiscal year gone by, which is in line with its revised estimates in the interim budget presented in February.


However, the interim budget revenue estimates for FY24 were revised downwards in the revised estimates by approximately Rs 7000 crore. The ministry plans to earn Rs 2.78 trillion in FY25.

 


A segment-wise break up of railway revenue was not immediately available.

First Published: Apr 02 2024 | 7:35 PM IST

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