Railways freight customers may get fixed rate contracts on incremental freight loadings

Posted by Daily Shipping Times on 20-02-2017        Tweet

NEW DELHI: Transporting goods by train may soon get cheaper as the Railways Ministry is looking to launch special freight schemes with attractive long-term contracts for its customers as well as discounts on incremental freight loading.

Several other usage charges will be waived for key customers as part of the plan, officials said. “All customers transporting through railways will get a price predictability that the logistics cost won’t go up for the next three years. In the last two years our freight for different sectors has gone up by over 20%. So, this will help customers save on the logistics cost,” said a senior Ministry official.

As per the plan, railways will offer three-year contracts to its customers with fixed freight rates during the period, along with discounts of up to 15% for incremental loading.

Freight accounts for almost 65% of total revenues of railways and helps it cross-subsidise passenger segment. Indian Railways expects to earn revenue of Rs 1.18 lakh crore from freight loading in 2017-18. The loading target has been set at 1,165 MT, which is 70 MT more than that for the current fiscal.

The planned incentives will effectively bring down transportation cost for commodities such as steel, cement, fertilizers, food grain and automobile, among other commodities, the official said. This policy will cover all commodities excluding coal. “We have not done it for coal because we have loaded 23 MT more coal this year than what we did last year,” the official said.

The Railway Board’s member traffic Mohd Jamshed had recently told about the freight sector reforms being undertaken by the Ministry. “We are taking a large number of course correction measures to retain our share,” Jamshed had said. “We now have timetabled freight trains offering more predictability to customers.