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Can rail freight help fast-track India’s logistics growth?

Rail freight in India plays a pivotal role in the nation's transportation infrastructure, moving 27% of all goods in the country across its 68,000-km network. With one of the largest railway networks in the world, India's freight trains traverse diverse terrains, connecting industrial hubs, agricultural regions, and ports.

Operated under a single administration – the Indian Railways – the freight system handles an array of commodities, including coal, minerals, agricultural produce, petroleum products, and manufactured goods, and moves approximately 1.4 billion tonnes of freight traffic.

Investing in the future of logistics in India
In recent years, the Indian government has been focused on making the country a global logistics powerhouse and has invested in numerous schemes and projects towards this goal. In 2022, the National Logistics Policy was launched to provide a tech-enabled, integrated, cost-effective, and sustainable logistics ecosystem. As part of this policy, the 900-acre Integrated Multi-Modal Logistics Hub is being developed in the state of Haryana, to centralise freight consolidation and reduce logistics costs.

Budgets have been set aside for the construction of expressways and dedicated freight corridors, and private investment is being encouraged for the development of logistics hubs and improved warehousing facilities to reduce freight costs and improve lead times.

Additionally, dedicated rail freight corridors have been commissioned to reduce road congestion. These developments can be a game-changer for the country's logistics industry, which has till now been riddled with problems of storage, inconsistent visibility and tracking, freight clearance issues, complex documentation processes, and lack of expertise.

Way forward for Indian rail freight
Despite various setbacks, Indian Rail is set on expanding their freight network with the construction of dedicated freight corridors, digitalisation of schedules and documentation, and set-up of freight hubs. "Most of the global railway systems originated as government controlled. If DB (Deutsche Bahn AG), and CRRC (Chinese Railways) can reinvent themselves, then why can't Indian Railways?" asks Lalit Trivedi, Retired General Manager, Indian Railways. "Even in India, till a few decades back, airlines, telecom, banking, power utilities, etc., were government controlled. Today there are multiple competing players resulting in superior services to customers," he adds.

For rail freight to develop and offer competitive logistics solutions, there needs to be a collaborative effort between the railway administration and private logistics companies to address various aspects of the system. These include:

  • Intermodal connectivity
  • Infrastructure development
  • Technology integration
  • Equipment upgrades
  • Operational efficiency
  • Customer relations and transparency
  • Policy reforms
  • Skill development

Embracing the potential of rail freight with investment by the government and industry stakeholders will not only enhance the efficiency of logistics operations in India but also contribute to a more sustainable and resilient economy.

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