Indian Railways needs to look beyond bulk commodities like coal and steel and focus on the parcel business
The pan-India business for parcel transport is estimated at one lakh crore rupees. However, in 2013-2014, Indian Railways earned Rs1,827 crore, a mere 1.8 per cent. This because the railways has traditionally been in this business of carrying bulk commodities such as coal, which forms about half of its freight. This is followed by iron ore, cement, fertilisers, food grains, limestone, petroleum products, containers and steel. Carriage of parcels is mostly done in parcel-cum-luggage brake vans that are attached to the ends of Rajdhanis and other super-fast trains. However, on certain routes, where volumes exist, such as from Nasik to Patna and Kolkata, full parcel vans are attached to the express trains.
Over the years, the parcel business has been progressively leased out to freight forwarders who aggregate, load and unload the vans. Aggressive marketing by the railways to transport consumer products including white goods, fast-moving consumer goods, etc has been minimal.
In order to become a major player, the railways will have to provide speedy, safe and punctual running since the parcel business is highly time sensitive. Also, there should be a tariff so as to attract those in the business to opt for the railways. Most people have a fleet of trucks that are doing their job fairly well.
Moreover, the shipper will have to add warehousing at both the ends, provide for the last mile connectivity, and hence, the railways’ rates will have to beat the existing truck rates by a margin of at least 30 per cent to 40 per cent to make it worthwhile for a shipper to switch to the railways.
Normally, the parcel business falls into three distinct segments viz, freight resembling, express distribution and express plus deliveries such as in the airlines. Railways has a good chance to win over the first two categories, of course if the tariff is just right and is not subjected to mid-year changes as has been happening often in the past with the freight tariff.
last mile connectivity too is crucial for which the railways is not equipped, nor can it afford to be. Since the railway's role is limited to a carrier, it will have to rely on private players to take care of. Undoubtedly in order to succeed, Indian Railways will have to get some of the major players in the logisitics business such as Gati, Safexpress, Blue Dart, XPS etc for its foray into this business.
The Railway Board mandarins will have to first sit across the table and understand the needs and concerns of the shipper. Considerable analysis will have to be made to zero onto the most heavily used sector for a pilot project to take off. Problems will have to be ioned out and a working model needs to be put in place.
A new design for the parcel vans with better fare to pay load has already been developed by the Research Design and Standards Organisation. This will increase throughout by 25.6 per cent over the existing Integral Coach Factory type parcel van. The volumetric capacity of 144 cubic meter of the existing design has been hiked to 180 CuM. This can prove to be a game-changer and can give the shipper more value for his money.
Using CASNUB bogies, which is a standard fitment on box wagons, it will have a speed potential of 100 kmph. while an axle load of 22.9 tonne as against the present 16 tonne will provide higher pay load of nearly 60 tonne.
Additional facilities for strapping and securing loads will ensure that they don't shift during the run, while the present single sliding door has been replaced by two, which are extra wide and are in two-part. The 2.4 meter wide doors with a 2.1 meter will also allow fork lifts to enter it for faster mechanised loading and unloading.
A prototype under manufacture at Texmaco, one of the premier wagon builders in the private sector located in West Bengal, would soon be subjected to speed tests before entering service, perhaps in April '16. A Refrigerated variant would be next on cards if and when the demand arises.
However, in this business, each sector and type of parcel demands a separate tariff and Railways policy of one size fits all, and take it leave it attitude may not work any more, what with the road sector offering more options for a cost effective solution.
According to some experts in the logistics business, there is enough parcel traffic for Railways to run a rake of 25 Parcel vans on the golden quadrilateral of Delhi-Mumbai, Delhi-Kolkata, Chennai-Kolkata, Chennai Mumbai along with the diagonals of Kolkata-Mumbai and Chennai-Delhi — twice a week.
A lot of parcels, considering each train will have 4500 CuM in volume or 1500 tonnes of pay load, able to take over 160 of 9 tonner monsters off the road, reducing air pollution and road accidents .
A determined beginning with an open mind is what the 1.4 million strong behemoth has to now embark on, to fully leverage its vast 65,000 kms. Network in order to get a much bigger share of the ‘Parcels' pie, and in the process substantially improve its bottom line!
(The writer is a former Member, Railway Board)