Railway freight in India has been one of the most important modes for the logistics. This has been the second largest share in the freight logistics sector behind road transport. As a country with many metropolitans and states located inland, freight transport is dependent on the land modes. Freight volume carried by the Indian Railways has reached 1.23 billion metric tons. The railway sector in India was the third largest in the world.

India’s logistics industry faces unique challenges as India has an expansive geographic presence and large population. When it comes to efficiency, it lags behind many other countries due to an inefficient modal mixture, especially being overly dependent on road transport. As railway provides the most economical freight solution in India, the government invested heavily in the modernization and expansion of the railway system to improve efficiency and reduce costs of logistics across the country.

The Indian railway network is the third largest in the world. With focused attention from the government and investments in improving infrastructure, the railway sector is recognized as one of the largest railway systems under single management. Apart from carrying over ten thousand passengers per day, more than seven thousand freight trains play their part in carrying over three million metric tons of freight per day. In financial year 2021, the average freight rate per metric ton across the country was 1.61 Indian rupees per kilometer.

National level investments have played an important part for the tremendous growth of the sector. In 2008, the country spent almost five U.S. dollars per thousand dollars of GDP on rail infrastructure. The capital expenditures on the sector have also gradually increased over the years. The capital expenditure value of the railway sector was 20 billion U.S. dollars in financial year 2018.

The dedicated freight corridor has helped the modal (freight movement) shift from roads to the rail in India as per a report by credit ratings agency care edge. The model shift is currently ongoing despite a host of factors including the absence of a sector regulator posing problems.

As per the report, container cargo transported through railways ( rail volumes) rose by a healthy 17.63% you to 74.38 million metric tonnes during the previous fiscal as compared to 12.51 % in overall container cargo volumes supported by partial connectivity of the dedicated freight corridor (DFC). Major factors facilitating the shift are the slated competition of the DFC project by June 2023, increased trips of cost-effective double stack container trains and incremental volumes of cement cargo through railways. Transit assurance under DFC aiming to squeeze the travel period by 40–50 percent for some of the major routes and over 3x growth in the movement of cost-effective double stacker container trains by FY 25 will accelerate this transition. Container rail volumes to grow at a healthy CAGR of 15.60% for FY2022 to FY2025.

According to estimates inventory carrying costs amounts to 43% of the overall spend of logistics. Therefore reduction in transit duration is expected to “ help achieve just in time based inventory management thereby boosting the cost competitiveness of domestic goods. Few of the challenges currently to this shift include higher haulage rates for freight traffic due to extensive cross subsidisation of passenger traffic and the absence of a regulatory body for the railways.

So, Overall, the railway logistics revenue in the sector has witnessed steady growth over the years. The revenue of freight rail transport across the nation was projected to be close to 2.5 billion U.S. dollars in financial year 2018. With increasing participation from public as well as private sector firms, both domestic and international, the freight traffic is likely to grow rapidly, possibly resulting in more employment opportunities and revenue generation from the industry.

Indian railways is soon introducing train based on Vande Bharat express platform with an aim to facilitate faster movement of freight across its network.

Indian railways have said that these trains will be super-fast parcel services which carry time-sensitive cargo too. Railways currently runs 4 passenger Vande Bharat train services which are self-0propellef train sets with 160 kmph speed potential. The new freight train based on the Vance Bharat platform is this expected to speed up freight movement. In addition to this, its also planning to introduce super-fast parcel services which will enable to carry high value time sensitive cargo.

Gati Shakti, the government policy covers the Vande Bharat based freight trains which is expected to be ready soon. This would also help new type of services like small size parcel shipments by running dedicated high speed freight trains.

Few facts of Vande Bharat Trains which are important.

• The 16-car formation will have a payload of 264 T. There will be a provision for temperature sensitive cargo shipments.
• The self-propelled 16 car train set will have an operational speed potential of 160 kmph
• Designed for palletised container transportation, the new Vance Bharat based freight EMU will have 1800 mm wide automatic sliding plus doors
• The train will have a pneumatically retractable roller system with locking arrangements for easy handling of pallets
• Like the passenger Vande Bharat trains, the new fright EMU will make use of the concept of distributed powering, with 50% powering.

So, Overall, with various government focus on as per NLP-2022, Gati Shakti, Vande Bharat trains etc, the railway logistics is bound to take a larger market share and see a spike in loads as its now getting ready to carry all size & types of cargo which traditionally is moving either by road or air. The railway logistics revenue in the sector has witnessed steady growth over the years. The revenue of freight rail transport across the nation was projected to be close to 2.5 billion U.S. dollars in financial year 2018. According to National Plan 2030, the projected potential growth of freight traffic on Indian. Railways indicates that the rail traffic has a potential for almost 2.5x growth over the next decade. This is subject to improved logistics performance on rail which soon the customer will witness. The National Rail plan predicts that if railways were to gradually increase the average speed of freight trains and reduce tariff, its modal share in freight transportation colourless rise to 44%. This is a +16% shift from road to rail. With increasing participation from public as well as private sector firms, both domestic and international, the freight traffic is likely to grow rapidly, possibly resulting in more employment opportunities and revenue generation from the industry.