Table of Contents
Overview of Freight Transportation
Freight transportation, a critical component of the economy, plays a crucial role in the supply chain management of businesses across various industries. Freight transportation refers to the movement of goods and materials from one place to another with the help of various modes of transportation such as trucks, aeroplanes, trains, and ships.
There are various types of freight transportation and each has advantages and disadvantages. These transportation facilities help businesses make informed decisions about the movement of their goods.
1.Road Transport
Road transport is the most common way of freight transportation. The vehicles used for this purpose are trucks, cars, autos, and more, depending on the size and weight of the cargo transported.
Freight transportation via roads allows flexibility and door-to-door delivery. However, the road transportation can be affected by the traffic congestion and extreme weather conditions.
| The Road Transport sector accounts for 60% of the freight traffic movement in the country. |
2. Rail Transport
Rail transport involves using trains to transport goods over a long distance. The trains can carry a large amount of goods efficiently and cost-effectively. As rail transport produces less emissions, it is more environmentally friendly.
However, it is less flexible and requires a lot of rail lines and terminals.
| As of April 2024, the share of railways in the freight transportation is 27%. It is expected to go up to 45% by 2030. |
3. Air Transport
Air transport is among the fastest modes of freight transportation, as it carries goods long distances. It is the best transportation in case of emergency however, these are expensive compared to the other modes of transportation.
Air transportation can be affected by extreme weather conditions and flight cancellations leading to delays in the supply chains.
| Air transport shares only about 1-2% of the freight transportation. |
4.Water Transport
Usually used to transport goods from one country/ continent to another, water transport is a cost-effective method for freight transportation for long distances.
However, freight transportation through ships, tankers, or bulk carriers can take more time in comparison to air transport.
| Water freight transportation shares only 2% of freight transportation, however, the government plans to increase share to 5% by 2030. |
Impact of Freight Transportation on the Indian Economy
1.Backbone of Trade
Freight transport is the backbone of trade, helping to transport goods both domestically and internationally. The trucks, trains, vans, ships, and aeroplanes move goods from one place to another, facilitating commerce on a global scale and helping to raise the economy. Without effective transportation facilities, the supply chains would be disrupted and market access would be reduced.
2.Employment Opportunities
The freight transportation industry is a major source of employment opportunities. It provides job opportunities in various categories like drivers, warehouse workers, logistics professionals, and maintenance personnel. Freight transportation is a wide network offering employment opportunities in multiple roles.
3.Supply Chain Efficiency
For businesses to grow, it is essential to have an efficient supply chain. Freight transport ensures that raw materials reach factories and finished products reach customers. An efficient and optimized supply chain reduces overall costs and enhances competitiveness in the market.
4.Global Trade
Freight transportation helps to transport goods and services not only within the country but also on a global scale. This helps the local industries to access global markets and the economy to raise their foreign exchange reserves.
5.Economic Growth
Investments in infrastructure and logistics systems, such as highways, railways, and ports, raise economic growth. These investments create more job opportunities, increase economic activity, and enhance competitiveness.
| India’s logistics industry contributes 14.4% to the country’s GDP. |
Historical Background: Evolution of Freight in Railways
Post-independence, 90% of the freight was composed by the Indian Railways.
| 1966 | The first freight service was started with containers between Bombay and Ahmedabad. |
| 1997 | Freight services began on the Konkan Railway. |
| 2001 | In January, freight services between India and Bangladesh resumed officially after a gap of 25 years on the Petrapole-Benapole BG link. |
| 2021 | Prime Minister Narendra Modi launched a 306 km route from New Rewari to New Madar. |
Current Infrastructure of Freight Transportation
Rail transport in India consists of both passenger and freight shipments. The national rail network has a total route length of 68,907 km, with more than 1,29,000 km of track and 8,000+ stations. The Indian rail network is the fourth-largest in the world.
| Freight Trains | According to the 2024 report, the Indian Railways has 9,146 freight trains. |
| Freight Earning | Freight earnings in June 2024 stood at Rs 14,798.11 crore. |
| Freight Loading | In June 2024, the Indian Railways achieved the highest freight loading of 135.46 million tonnes. |
| Freight Corridors | Two Dedicated Freight Corridors (DFC):The western route (Jawaharlal Nehru Port to Dadri) Length: 1504 kmIt covers Haryana, Rajasthan, Gujarat, Maharashtra and Uttar Pradesh.The project is funded by the Japan International Cooperation Agency. The Eastern route (Ludhiana to Dankuni)Length: 1861 kmIt covers Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West BengalThe majority of the project is funded by the World Bank. |
| Freight Terminals | The freight terminals include- Kanpur Central in Uttar Pradesh, Barkakana in Jharkhand, Bhusaval in Maharashtra, and Chennai Egmore and Okhla in Delhi. During 2022-23, 30 freight terminals were created. |
| Freight Train Speed | The average Freight Train speed has increased to 44.36 kmph during 2021-22 compared to 42.97 kmph during 2020-21 |
| Alstom has successfully delivered 300 electric locomotives to the Indian Railways. It will help Indian Railways to meet the freight targets as these locomotives will allow faster delivery of the goods. As part of its contract worth €3.5 billion, Alstom is supplying 800 high-powered double-section locomotives of 12,000 HP (9 MW) for freight service. Designated as WAG-12B by Indian Railways, these locomotives are capable of hauling approximately 6,000-tonne rakes at a top speed of 120 km/hr. |
Operational Aspects
| The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is a public sector undertaking that plans, develops, and mobilises the financial resources and handles the construction, maintenance and operation of the Dedicated Freight Corridors. On October 20, 2006, DFCCIL was registered as a company under the Companies Act 1956. |
Challenges Faced
| Infrastructure Development and Financial Investments | To enhance rail freight transportation, there is a need to strategise infrastructure upgrades besides financial investments. The railways require a comprehensive set of infrastructure, including tracks, tunnels, terminals, and stations. Apart from expansion, there is a need for regular maintenance and improvements in the existing infrastructure. Infrastructure challenges also include the establishment of new security systems within the railway network. The authorities should emphasize reliable power supplies, communications networks, and strategically located access points. |
| Operational Inefficiencies | Railway systems face challenges in operational efficiency such as scheduling, routing, and handling of goods. Advanced technology plays an important role in enhancing the speed, accuracy, visibility, and traceability of railway transportation. Competition from other modes of transportation and the high costs associated with infrastructure investments show that ageing railway infrastructure is a common issue. This impacts capacity and access, demanding the booking of time slots and limiting the availability of slots for freight trains. |
| Regulatory Compliance | From safety to environmental regulations, the regulatory framework impacts railway freight providers and their operations. Cross-border freights extend the problem as it requires understanding and compliance with various policies and regulations. The regulatory framework advances regularly due to technological advancements, requiring new modes of transport and regular updates. This requires new permits and licenses which are both expensive and lengthy. |
| Capacity Limitations | The capacity of rail freight is comparatively less than the of sea freight. These capacity constraints become difficult to handle during peak demand periods. The locomotive vehicle availability and the shortage of infrastructure make it difficult to fulfil the present and future demands, as well as the expectations of the shippers. The capacity limitation and issue of congestion can affect the performance and competitiveness of railway transportation during crisis and crisis management. |
Rail Freight VS Other Transportation Facilities
1.Cost Efficiency
Rail freight transportation is three to four times more affordable than road transport facilities like trucks. A truck can handle only about 1 to 2 containers per trip but the trains can carry a few hundred containers per trip making it cost efficient. Air freight transport is much more expensive as compared to the other transportation modes due to fuel cost
2.Door-to-Door Delivery
Road transportation facilities like vans and trucks usually allow for door-to-door delivery services, however, it is not possible in the case of rail freight transportation. The freight transportation via rail or air reaches a specific destination which further needs to be transported via local transports to the destination
3.Flexibility
The trains and aeroplanes have proper schedules and they leave according to their set schedule. However, trucks and vans offer flexibility as they leave the destination according to the demands and can wait a few minutes during delays.
4.Traffic Congestion
The trucks and vans are prone to get affected due to road congestion, leading to delays in delivery of goods. However, trains and air transport are not affected by any traffic congestion and allow for timely delivery of goods.
Future Prospects of Freight Transportation in Indian Railways
| Freight Traffic | By 2031, the freight traffic is expected to cross 8,220 million tonnes. |
| Freight Corridors | 6 high-capacity, high-speed dedicated freight corridors. |
| Freight Loading | Aim to raise freight to 3.3 billion tonnes by 2030 |
| In the 2024 Budget, Finance Minister Nirmala Sitaraman announced that 3 major economic railway corridors will be implemented-Energy, Mineral, and Cement CorridorsPort Connectivity CorridorsHigh Traffic Density Corridors |
Conclusion
Freight transportation plays a crucial role in the Indian economy, with rail transport being a crucial component of freight transportation. Despite facing numerous challenges, Indian Railways aims to increase freight traffic to 8,220 million tonnes by 2031 and develop high-capacity freight corridors.
With investments in infrastructure and technology, rail freight can become even more efficient, cost-effective, and environmentally friendly. As the backbone of trade, freight transportation will continue to drive economic growth, employment, and global trade. By addressing operational inefficiencies and regulatory compliance, India can achieve its full potential in freight transportation. Freight transportation in Indian Railways has a bright future with a major focus on development.
