Category Archives: Rail/Road

The Indian Railways has announced a discount of five per cent in the freight rates to the Container Train Operators (CTOs) to attract more containers to the rail mode. The discount will be valid till April 30 next year. Indian Railways has taken this step to get more freight at a time when the country is facing lower demand throughout the pandemic. The move, however, does not satiate the private container train operators (CTOs), who had wanted to waive off of entire haulage charges on movement of empty containers. The Association of Container Train Operators (ACTO) had sought continuation of waiving off-of haulage charges for moving empty boxes. This discount also aims to lower the logistics cost.

In order to ensure fast transportation of agricultural produce across the country, Indian Railways has launched Kisan Rail service for transportation of perishable goods with refrigerated coaches. The train will run between Deolali in Maharashtra to Danapur in Bihar covering the journey of 1,519 kilometres in 32 hours. It is expected to reduce transportation costs by Rs 1000 per tonne compared with roadways and reduce travel time by around 15 hours. Narendra Singh Tomar, Agriculture Minister, says, “Kisan Rail would help the farmer get his due for his produce. Kisan Rail and Kisan Udan were announced to ensure farmers are able to avail robust transport facilities. During lockdown, Railways ran 4610 trains and as a result, there was no shortage of food supply.” The train will halt at Nasik Road, Manmad, Jalgaon, Bhusaval, Burhanpur, Khandwa, Itarsi, Jabalpur, Satna, Katni, Manikpur, Prayagraj Chheoki, Pt. Deendayal Upadhyay Nagar and Buxar. The train, which will run on a weekly basis, is expected to build a national cold supply chain for perishable items like fish, meat and milk.

Given the prevailing circumstances and its near impact on the industry metrics, ICRA (formaly known as Investment Information and Credit Rating Agency of India) has revised the outlook on the logistics sector from ‘stable’ to ‘negative’. With intermittent lockdowns still in place in several pockets across nation and muted recovery anticipated in the industrial activity, the logistic sector including warehousing sector is likely to witness sharp demand contraction in the near-term. Consequently, in FY2021, ICRA expects a contraction of 18-20 per cent Y-o-Y in aggregate revenues of its sample of logistics companies. Additionally, the near-term profitability metrics are anticipated to remain under pressure given the subdued fleet utilisation levels in light of muted freight availability, and continued high fixed costs such as driver salaries, truck EMIs and maintenance costs. Accordingly, the outlook on the sector has been revised to ‘negative’ from ‘stable’. The rapid rise of Covid-19 pandemic and subsequent restrictive measures implemented by the central and state governments to contain the disease has adversely impacted the prospects of the Indian logistics sector, especially the road freight transportation movement. The implementation of the 40-day nationwide lockdown aggravated the prevailing softness in the Indian economic activity, resulting in a decline in freight availability during Q4 FY2020, which further contracted sharply in Q1 FY2020.

GEFCO France has recently announced that the company will be handling the distribution of new vehicles of the Ford brand to its network of dealers throughout France. While the company was already providing storage and transport services for a few thousand new Ford vehicles to its national dealer network, this new partnership demonstrates the manufacturer’s confidence in GEFCO’s expertise in automotive logistics. The company was selected by the car manufacturer, following a consultation, for the distribution of 40,000 vehicles per year in total. According to the new distribution plan defined by the manufacturer for France, which is part of a system of direct deliveries, GEFCO France has been carrying out car dealerships, handling and transporting Ford vehicles, since the reopening to customers in May.

Despite the COVID-19 pandemic, Indian Railways has surpassed freight traffic as compared with the corresponding period last year. The national transporter increased the average speed of its freight trains to 46.16 kmph which is more than double as compared to its speed of 22.52 kmph last year. The freight loading was 3.13 metric tonne (MT) on July 27, which is higher than last year for the same period, with an increase of 0.3 per cent. However, the cumulative, overall loading of freight trains remains 18.18% less than last year. On July 27, the Railways loaded a total 1,039 rakes with freight including 76 rakes of food grains, 67 rakes of fertiliser, 49 rakes of steel, 113 rakes of cement, 113 rakes of iron ore and 363 rakes of coal. “Railways has achieved record loading of foodgrains this fiscal which is 80 per cent more than last year, and has also introduced time tabled parcel services – 4,541 services and transported 2.41 lakh tonnes cargo generating a revenue of Rs 86.88 crore,” said VK Yadav, Railway Board Chairman.

Indian Railways has completed the construction of caving work for the one-kilometre long tunnel of Western Dedicated Freight Corridor (WDFC) through Aravalli mountain range, near Sohna in Haryana. The plan is to ply electric goods train with double-stack containers through it in the next 12 months. Once operational, a double-stack container goods train will be able to run at a speed of more than 100 kmph in this tunnel. The tunnel connects Mewat & Gurugram district of Haryana and negotiates a steep gradient on the uphill and downhill slope of the Aravalli range. The D-shaped tunnel has a cross-sectional area of 150 square metres to accommodate double line with higher OHE (Over Head Equipment) to enable double stack container movement on WDFC.

The government is making efforts to attract FDI in infrastructure sector to address liquidity crunch faced by the COVID-19-hit economy. Stressing on the need to bring down the logistics cost, Nitin Gadkari, Union Minister of Road Transport, Highways & MSME, said “Rs 1 lakh crore Delhi-Mumbai Expressway will result in reducing the travel time between the two metropolises to barely 28 hours resulting in lesser logistics cost by way of enhanced cargo movement in lesser time.” Gadkari also urged private players to join hands with government. He said the economy, hit by coronavirus, is passing through a crucial phase and requires liquidity. At the same, COVID-19 crisis should be turned into an opportunity as the world is now recognising India as a good place for investment.

In its endeavour to facilitate the demand of trade, Indian Railways has sent its first container train to Bangladesh connecting the two countries through Petrapole-Benapole border in West Bengal. The train carried FMCG in 40 containers and fabrics in 10 containers. The exporters from India were Procter & Gamble, Arvind and Vardhaman Textiles. This will be a permanent service connecting selected terminals of CONCOR to various stations in Bangladesh (Benapole, Jessore, Singia, Noapara, BBW). The inaugural container train ran between two countries from CONCOR’s CFS at Majerhat, Kolkata. This builds upon an experimental shipment launched by CONCOR and Indian Railways in April 2018, which used the Gede-Dharsana railway border crossing.

Federation of Freight Forwarders’ Association in India (FFFAI) along with CONCOR and RZD Logistics (Russian Railway) has organised an interactive webinar to discuss the trade potential of containerised transportation over the International North South Transport Corridor (INSTC). Calling INSTC an opportunity for regular movement to CIS countries, Shankar Shinde, Chairman Elect, FFFAI, says, “We have been continuously working on this route for development and found that this route would help the trade with less transit time and add upon alternate products such as agro commodity with good shelf life. This is also a good opportunity for NVOCCs, consolidators and multimodal transport operators to come on board in order to start their operations.” INSTC Agreement was signed between India, Iran and Russian Federation to facilitate movement of goods via Iran, Caspian Sea and Astrakhan to Russia and adjoining countries of the CIS region. The Agreement provides for a shorter route for trade to Iran, Russian Federation and beyond. Through this transportation route India’s exports can get a competitive advantage due to lower cost and less delivery time.

The South Central Railway (SCR) has announced the operation of Indian Railways’ first Cargo Express which will run between Hyderabad and New Delhi from August 5. As part of the initiative to increase the market share of railways in the movement of general cargo across the nation, the SCR has come out with a concept of starting a Cargo Express, under which a time tabled freight train will start from Sanath Nagar, Hyderabad to Adarsh Nagar in New Delhi. The train will depart every Wednesday evening from Hyderabad and reach Delhi on Friday morning. “The zone has always been a step forward in introducing customer friendly initiatives for the freight segment and introduction of Cargo Express will further strengthen these initiatives,” said, Gajanan Mallya, General Manager, SCR. “The concept will be particularly beneficial to agriculture producers, traders, cargo movers, small and medium/ mini plant owners who will be able to move their cargo in record transit time at very low tariffs,” he adds.