Rlys, India Post join hands to widen parcel business

With packets and sacks containing apples, motor vehicle parts, agricultural produce, mail vans and baggage of defence personnel jostling for space at parcel booking counters of the Indian Railways, the national transporter is now exploring the potential of using its network to move India Post parcels, too.

“The Member-Traffic of the Railway Board and the Secretary, Department of Posts, are evaluating the potential of carrying parcel cargo on trains. They have already had a few meetings,” Manoj Sinha, Minister of State for Railways and Minister of Telecom and IT (independent charge), told BusinessLine recently.

He said the share of the Railways in India Post’s overall traffic is about 1 per cent, while the share of Railways’ revenue from parcel traffic is 4 per cent.

Mohd Jamshed, Member-Traffic, Railway Board, said: “We are working with the postal department to run some SLRs (seating-cum-luggage rakes) on identified routes for their goodshed. Joint teams are working on it. The postal department has a huge reach in small villages, and they want these spaces to be used for courier services, including transportation of water. For instance, water from the Ganga river can be moved in 2-litre and 5-litre cans. They are bottled in Haridwar. Their network can also be used for e-commerce.”

Apart from postal department, the Railways, with about 7,000 stations across the country, is also working on various strategies to increase income from parcel traffic, which has stagnated at ₹1,800-2,000 crore in the past few years.

“Parcel would be an important segment to augment revenues. We have had meetings with parcel operators to gauge what is required to be done by the Railways,” Jamshed added.

Railways handles traffic in three categories. First is SLR, which are basically luggage vans in the trains. These have four tonne compartments in the front and rear of the train.

Second, people opt for full coaches or vehicle parcel units (VPUs), which can be attached to a train. Third, Railways are looking to run full parcel trains comprising 20 such coaches or VPUs.

“We are looking at all three segments, and have estimated that the potential is much higher. We have given ourselves an ambitious target of ₹ 3000 crore this year for revenue generation,” he said.

The strategy has been to target the SLRs or luggage portions of trains with about 5,000 compartments, which can be leased for three-five years.

“We usually lease about 1,000-1,200 such compartments. Now, tenders have been floated by zonal railways for over 5,000 SLRs,” he said.

The leasing period has been increased by one year in each segment to four, five and six years. Also, the zonal railways have been allowed to lower the reserve price at which they can lease SLRs.

Also, VPUs will be available on demand. “We have also liberalised the policy for running full VPU trains from five to six years. Different zonal railways have received offers for about 27 parcel trains, of which one was from Guwahati-Howrah-Delhi. Let’s see how many are finalised. Players include not just merchants moving fruits with seasonal demand, but larger players such as Gati, who were moving cargo on trains earlier.”

Otherwise, there is seasonal demands to transport fruits (grapes and oranges) from Nagpur, Nashik, mangoes from Andhra Pradesh to Delhi, banana from Bhusawal to Delhi. The first lot has been tendered out, between Delhi and Guwahati, which runs regularly.

The Railways has also opened the parcel sector to private container operators. “Private container operators have side opening containers, which are like domestic wagons. These can be used like wagons, consolidating loose cargo from a goodshed to move to another point. The Container Corporation has just run a train for the domestic segment from Dadri depot near Delhi, which is a first,” Jamshed added.

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