Railways to become logistics provider

Written by Rajat Arora | New Delhi | Updated: Mar 5 2013, 06:34am hrs
Indian Railways, which is gradually losing its freight traffic to road, is planning to transform itself from a transporter to full-fledged logistics provider. The national transporter has also ommissioned a study to determine the size of railable freight traffic in India.

The per cent share of the railways in the transport sector has come down. Its a matter of great concern for us. To remain afloat in this competitive environment, we have to become a logistics provider rather than just a transporter, rail minister Pawan Kumar Bansal said.

To increase its share in freight transportation, the railways is renewing its focus on building warehouses, providing last mile onnectivity and user friendly policies.

We need to integrate all these services. The public private partnership has been there to get private players but there has hardly been any progress, Bansal added.

According to rough estimates available, railways has 30% share in goods transportation. Till the 60s, the railways had 90% share in the goods transportation sector.

Meanwhile, to assess the potential of the rail freight market, the railways has also commissioned a study to determine the per cent of total railable traffic. Theres no concrete number available to know the size of the total railable freight market. We have asked RITES to do a study. Their report will be out in a month or so, Vinay Mittal, chairman, Railway Board, told FE.

The railways is planning to increase its share in the white goods freight segment, which is usually transported via roads. Our share in the white goods freight segment is inadequate, Mittal added.

At present, the railways carries 90% bulk commodities and the rest are white goods. The railways has been witnessing a decline in white goods, a high-margin market in which the railways has a limited foothold.

The railway is also gradually increasing its share in auto freight.

The national transporter has notified a new automobile freight train operator scheme.

Maruti and APL logistics have registered with us to run the rakes. We are charging a one-time registration fee of R5 crore and minimum investment of three rakes, Suhash Kumar, adviser (freight marketing) said.