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Freight users encountered minimal network congestion during Q4 2023

By   /  May 1, 2024  /  Comments Off on Freight users encountered minimal network congestion during Q4 2023

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MUMBAI, India — Dun & Bradstreet, a global leader in business decisioning data and analytics, in collaboration with Jupiter Wagons, released the Indian Railway Freight Activity (IRFA) Index, an initiative launched amid the government’s efforts to enhance railway freight modal share. The report provides a comprehensive assessment of the dynamics of Indian Railway freight activity through the lens of the railway freight users.

At a quarterly frequency, the IRFA index comprises of two sub-indices – the Freight Activity Experience sub-index for the current quarter and the Freight Activity Optimism sub-index for the upcoming quarter, derived from a survey of railway freight users transporting freight through the five major railway zones i.e. Eastern, Western, Northern, Southern and Central. The index value ranges from 0-100, where 50 is the neutral level of railway freight activity on a year-on-year basis.

Key Findings:

The Indian Railway Freight Activity (IRFA) Index stood at 63 for Q4 2023, where an index value above 50, indicates an increase in the level of activity on a year-on-year basis and vice-versa.

The Freight Activity Optimism (sub-index) for Q1 2024 was higher at 67 compared to 59 for Q4 2023.

The IRFA index is the highest for the Northern railway zone and amongst the mid-sized railway freight transporters.

Sector-wise, IRFA index was the highest for the metals & mining and electric & electronics sectors, indicating both strong freight activity in Q4 2023 and high optimism for freight activity in Q1 2024.

The gap between IRFA optimism level for Q1 2024 and IRFA experience level for Q4 2023 is the highest for the Central and the Eastern railway zones and lowest for the Northern railway zones. This suggests that the Central and Eastern railway zones are expected to experience a higher pace of freight activity in Q1 2024 over Q4 2023 compared to other railway zones.

Availability and turnaround time for machinery for cargo handling and wagons improved the most in Q4 2023 compared to Q3 2024.

Freight users have experienced an increase in freight cost in Q4 2023 over the previous quarter and expects it to increase in Q1 2024.

Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “Our survey uncovered two compelling insights. Firstly, railway freight transporters are encountering minimal network congestion, with only an average of 13% respondents identifying it as a challenge for two consecutive quarters. This aligns with the government’s ongoing initiatives to alleviate congestion in railway routes and promote the shift of freight transportation from roads to railways. In February 2024, the government approved six multi-tracking projects spanning six states, anticipated to enhance wagon turnaround time, decrease logistics costs, and yield other indirect benefits such as reduced CO2 emissions. Secondly, our survey underscores a growing consciousness among businesses, particularly large and mid-sized enterprises, regarding sustainability in freight transportation. Notably, over one-third of these businesses are opting for railways to promote environmental sustainability.”

Hailing Finance Minister Nirmala Sitharaman’s announcement of plans to upgrade 40,000 regular bogies to Vande Bharat standards, mobility solutions provider Jupiter Wagons Limited managing director Vivek Lohia, said it is a dynamic move in the right direction.

Describing the announcement as a significant milestone in India’s railway modernisation journey, Lohia said that this initiative reflects a dedicated effort to elevate passenger safety, comfort, and operational efficiency to global standards.

“As the nation progresses towards modernising its railway infrastructure, this move underscores a commitment to excellence and sets a benchmark for future development. It is a testament to the ongoing efforts to enhance the quality and reliability of our railway services, ultimately benefiting millions of passengers across the country, that the proposal seems to have a transformative vision for the rail sector, emphasising strategic initiatives such as the port connectivity corridor, energy, mineral and cement corridor and more specially the high traffic density corridor. These corridors will signify a pivotal step towards enhancing connectivity, driving economic growth, and ensuring passenger safety.”

“With a focus on outcomes over outlays, the government underscores its commitment to timely delivery and cost-effective logistics solutions. Also, these are core infrastructures and every penny invested in core infrastructure has a rebound effect on the economy. The announcement reflects a bold stride towards holistic transformation and underscores the government’s dedication to modernizing India’s railway infrastructure.”

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