Logistics

Railways cuts telescopic benefits as freight moves shorter distances

Our Bureau New Delhi | Updated on July 17, 2012 Published on July 17, 2012

The Railways may have registered growth in commodity loading but the average distance for which commodities are transported is down.

As the distance that goods are moved through rail declines, the Railways plans to continue the trend of reducing telescopic benefit.

Mr K. K. Srivastav, Member – Traffic, Railway Board, told Business Line, “This (trend) will continue.”

The Indian Railways may have registered over five per cent growth in commodity loading in June 2012 year-on-year, but the average distance for which commodities are transported is down by over three per cent.

The Railways moved its customers’ cargo 638 km this June, against 658 km in June 2011.

The average lead was 679 km in 2010-11 and 676 km in 2009-10. To deal with this reduction in average distance, the Railways has been tweaking its freight rates in a manner so as to reduce the telescopic benefits, which it has traditionally given to customers.

Simply put, the progressive rate, at which the Railways charged lower for the longer distances, has sharply reduced.

This has helped the Railways register almost 27 per cent growth in earnings for moving a tonne of freight over a kilometre, but this is lower than the 23 per cent growth it has seen for every tonne of cargo.

However, the Government-run behemoth has set a target of increasing its average lead to 662 km in the current fiscal. For this, it could be helped by petroleum products, foodgrains, cement, steel, and domestic container movement. Those commodities that moved shorter distances include coal for thermal powerhouses and cement.

In June, the Railways moved 80.43 million tonnes of cargo, with a 5.23 per cent growth.

The freight earnings were at Rs 6,925 crore, up 29.21 per cent during the period.

> mamuni@thehindu.co.in

Published on July 17, 2012
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