Logistics

Rlys hikes freight rates by up to 20%

Mamuni Das Vishwanath Kulkarni New Delhi | Updated on March 12, 2018

railways

In what is likely to fan inflation, the Railways has hiked freight charges for most commodities including coal, foodgrains and fertiliser.

In what is likely to fan inflation, the Railways has hiked freight charges for most commodities including coal, foodgrains and fertiliser.

‘Rationalisation'

The late evening revision, which the Railways dubbed a “rationalisation”, caught users unawares, since the Railway Budget is round the corner.

The new rates came into effect from Tuesday.

The charges have gone by up to 20 per cent for most of the commodities, say sources in the know, based on initial calculations.

In a small concession, rates for iron ore exports for which the Railways had been charging the highest have been reduced by up to 31 per cent.

EARNINGS IMPACT

For the Railways, which is expected to garner about Rs 70,000 crore from freight earnings in the current fiscal, this hike would mean a potential to increase annual earnings by up to Rs 18,000 crore.

Railway officials maintained that the hike in freight charges is less than the hike in the Railways input costs over the last few years.

Another highly placed source told Business Line that for most of the commodities, the impact would be 8-18 paise per kg of commodity.

This translates to a hike of Rs 80-180 per tonne.

A further effective increase has been added by reworking the distance slabs.

IRON ORE EXPORTS

“The freight rate cut of Rs 475 per tonne does not mean much for the iron ore exporters as there are hardly any shipments happening now,” said Mr R.K. Sharma, Secretary General, Federation of Indian Mineral Industries (FIMI).

“Some exports are taking place from Goa.

“It is still unviable to export from the eastern belt of Odisha and Jharkhand. Only the ores stocked at ports are being exported now,” Mr Sharma added.

Fertiliser producers see no impact on them as the Government reimburses actual freight charges.

> mamuni@theindu.co.in

Published on March 06, 2012

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