By Vivek Lohia
India Railways’ freight performance is on a remarkable upward trajectory, with revenue of around Rs 2.56 lakh crores and freight loading surpassing the estimated 1580 million tonnes. The Indian Railways’ streak of best-ever monthly freight loading, which began in September 2020, continues unabated, indicating sustained excellence in operations. This success is further underscored by the freight transport unit, NTKM (Net Tonne Kilometer), which has witnessed an impressive growth rate of 10%, significantly impacting Indian Railways’ overall revenue growth. These milestones signal towards comprehensive strategies aimed at overcoming challenges and achieving a significant leap in financial performance and operational efficiency for Indian Railways.
While the freight sector shows promising growth, Indian Railways faces certain identifiable infrastructural bottlenecks. These include outdated tracks, inadequate terminal facilities, and connectivity issues. Such constraints only prove to impede efficiency and restrict the capacity of rail freight operations, undermining the competitiveness against other modes of transportation. Addressing these challenges is pivotal to enhancing the railway’s operational capabilities and fostering sustainable growth.
The railways made substantial yearly advancements in several capital expenditure (capex) projects in FY24, including network electrification, track commissioning, automatic signaling installation, and bridge construction. For sustained growth, investment in infrastructure is paramount, particularly in India, where logistics costs represent over 13% of GDP. High fuel prices, exacerbated by India’s status as a top crude importer, intensify the logistics burden, necessitating a shift towards rail transportation to reduce costs. Railways, known for their energy efficiency and low emissions, offer a solution.
The promise of faster, more efficient freight movement has led to the development of Dedicated Freight Corridors (DFCs). These corridors segregate freight traffic from busy passenger routes, enabling faster heavy-haul train movement. Upon full operation, DFCs will enable faster heavy-haul train movement, enhancing overall efficiency. Complementing these efforts are strategic initiatives like the Gati Shakti Master Plan and National Logistics Policy, which prioritize rail-centric multi-modal logistics. These initiatives facilitate industrial linkages and enhance supply chain efficiency, further reinforcing the importance of investment in infrastructure for sustained economic growth.
India’s objective is to achieve efficiency gains, cost reductions, and address the rising energy demand, all while promoting sustainability in logistics operations. Integrating rail freight with other modes of transportation like road and sea offers numerous benefits, as evidenced by India’s focus on the rail-sea-rail route for coal transport. This multimodal strategy not only reduces congestion and transport costs but also promotes environmental sustainability by minimizing the carbon footprint. Through the participation of various ministries such as Coal, Railways, Ports, Shipping, and Waterways, a concerted effort is underway to optimize fares, enhance infrastructure, and investigate alternative evacuation routes. This collaborative endeavor aims to strengthen first-mile connectivity, finalize rail connectivity projects, and adopt a railway-centric approach.
With India’s railway sector undergoing rapid digitalization, marked by the fourth industrial revolution, Railway 4.0. The adoption of state-of-the-art technology such as Internet of Things (IoT) in rolling stock operations and infrastructure management is revolutionizing the railway sector. From real-time train information systems to remote monitoring and management of locomotive systems enhance operational efficiency and passenger experience. Additionally, India’s railway sector has electrified over 38,000 kilometers of tracks since 2014 making it a significant leap from previous levels. The deployment of the Kavach system, certified for Safety Integrity Level-4, significant route kilometers and locomotives, including Electric Multiple Unit rakes underscoring Indian Railways’ commitment to enhancing safety measures. Leveraging technology and innovation, Indian Railways aims to improve safety, efficiency, and customer experience across its extensive network, reaffirming its position as a vital component of the country’s transportation infrastructure.
Policy initiatives promote competition, transparency, and fair access to rail infrastructure. This stimulates a more competitive market landscape, crucial for enhancing rail freight share and fostering a conducive environment for industry growth. Streamlining processes such as land acquisition, environmental clearances, and freight tariff structures can incentivize private sector participation and investment in rail infrastructure. By addressing bureaucratic hurdles and implementing reforms to encourage private investment, the government can facilitate the development of new infrastructure and initiatives like the Gati Shakti Multi-Modal Cargo Terminal (GCT) policy, “Mission Hungry for Cargo”, and Mission 3000 MT, ultimately driving the growth of rail freight and supporting economic development.
The imperative to increase rail freight share in India is crucial for economic growth and addressing environmental concerns such as reducing carbon emissions and lowering logistics costs. For optimal freight performance and overcoming infrastructural challenges, fostering seamless intermodal connectivity across the logistics chain and encouraging industries to embrace rail transport is imperative. By aligning with broader sustainability agendas and leveraging emerging technologies, the railways can continue to play a central role in India’s journey towards a more efficient, cost-effective, and environmentally friendly transportation system.
The author is Managing Director, Jupiter Wagons Limited
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