Indian Railways looks to diversify freight mix, tap alternatives

Representative image (PC- MoneyControl.Com)

Indian Railways is looking to diversify its freight mix to reduce dependence on coal, one of the mainstays of the state-run railroad system’s cargo transport business, senior officials at the ministry of railways said.

Railways wants to replace coal with more freight from the automobile, consumer goods and so-called white goods industries that include manufacturers of products such as air-conditioners, refrigerators, washing machines and other household appliances, said the officials, who requested anonymity.

Coal has an outsized share of the freight carried by Indian Railways. In May, for stance,  the national carrier loaded 114.8 million tonnes of freight, of which 54.52 million tonnes was made up of coal.

"Earlier due to (lack of) efficiencies of paperwork, improper minute-to-minute tracking and slow train speeds, the railways were losing out on the business of many industries," one of the officials cited above, adding, that Indian Railways was addressing its earlier concerns to increase share in freight transport.

Officials expect live tracking of freight loads, more efficient payment systems, faster train speeds, and lower tariffs to ferry some commodities to help increase its share of cargo transport from industries other than coal.

Business Development Units have been formed in each railway zone as well as at the ministry of railways to accelerate the effort.

“Now instead of the Railways waiting for customers to come, officials reach out to the industry to seek business, like a competitive player in the market. And we offer discounts and surcharge waivers,” the official quoted above said. 

The national carrier also expects its new online payment system to make freight charges transparent and to reduce the hassles involved in loading of freight sand making of payments, encouraging more industries, especially micro, small and medium enterprises, to shift cargo to Indian Railways.

Western Railway last week became the first division over the entire railways to implement the online payment system for freight charges on the transportation management system.

Also last week, Railway Board Chairman and Chief Executive Officer Suneet Sharma said Indian Railways had increased the loading of freight from the cement and automobile industries, among others.