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With the Railways Minister Mr Dinesh Trivedi accepting that rail cargo is increasingly losing its sheen to road transport because of continued rate hikes, lower revenues from freight is sure to be of concern. The share of rail in cargo transport is believed to have fallen to 20 per cent from 35 per cent over the last 10 years, most of which have been taken over by truckers, industry sources said.
Rail, a more eco-friendly alternative, usually wins in terms of speed over medium and long haulage sectors - at least above 300 km.
“The rolling stock and tracks are old. So goods earlier transported by rail, such as food grains, cement, steel, and fertilisers, are now also opting for road,” Mr S.P. Singh, Senior Coordinator, IFTRT, said.
In 2011-12, rail freight movement is expected to drop by 25 million tonnes against the initial target of 995 million tonnes, though the revenue is projected to remain at Rs 68,620 crore.
Last week, freight rates were increased by 12-20 per cent last week.
There are other reasons for the Railways losing out.
The lack of infrastructure, for example, specific wagons for carrying automobiles, sees it being given a miss in the transport of high-value goods and perishables.
On the other hand, road network and truck quality has considerably improved over the past few years.
AUTO HUBS
Also, there are other allied costs attached to rail cargo, such as operating a stockyard at both ends, transportation to and from the rail head, etc offset any cost advantage.
For auto companies, the rail network is usually beneficial only when transporting directly to ports for exports, or far-flung regions such as the North-East.
The cost can be as high as 40-60 per cent in other cases, said a Hyundai official.
Maruti transports about six per cent of its vehicles by rail, while Hyundai has a much lower 0.5 per cent share.
“As there is import traffic from Mundra to up-North, there are empty containers available from North to Mundra. We use these for transportation of our cars,” a Maruti official said.
Though creation of vehicle logistics hubs across the country to attract the automakers was envisaged in the past few Rail Budgets, companies say that not much progress has come about.
The Minister though kept ambition alive by promising introduction of a new car wagon capable of carrying 318 cars per rake.
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