Jul 1, 2016

Railways remained an Underused Mode in finished Automobiles transportation: SIAM

New Delhi: Less than 5 percent of outbound automobile logistics is through Railways. Auto traffic can enable Indian Railways earn revenue of Rs 2,500 Crore per annum. IR witnessed a continuous decline in share of Railways in total traffic. Its share of the freight traffic came down from 89% in 1951 to less than 40% in 2000, and now it stands at 30%.
Society of Indian Automobile Manufacturers (SIAM), while highlighting the significance of Railways in automobile industry, in its second day of Automotive Logistics Conclave held here on Wednesday, expressed keen to find alternate transport models for auto logistics and opted Railways as one of the best mode of transport.

The members expressed that Railways have remained an underused mode of transportation for finished automobiles. Less than 5 percent of outbound automobile logistics is through railways. Underdeveloped infrastructure at terminals for storage and handling, along with non-competitive pricing are key areas of concern in railway cargo transport.

The production and consumption patterns of automobile sector are growing in such a way that there is substantial demand for transporting the automobiles from one area to another.

Studies have indicated that 20 percent of auto traffic can be carried by rail. This will enable the railways sector to earn revenue of Rs 2500 crore per annum through rail freight against the existing Rs 100 crore per year.

Speaking on the occasion, UC Joshi, Executive Director (Freight Marketing), Railway Board, Ministry of Railways, said, “The Automobile Freight Transport Operator (AFTO) policy facilitates the investment on procurement of auto wagons and usage of Indian railways network for meeting the transport needs of the industry. This will be a well balanced situation for Indian Railways as well as the automobile industry/ logistics provider. In terms of logistics and other requirements, Indian Railways plans to introduce smaller capacity rakes to cater to lower volumes for smaller regions. We plan to put across a system which will enable us to monitor transit time and real time tracking of the consignment.”

Over the last decade Indian Railways has initiated measures to improve the operational and commercial performance of its rail freight operations. These have included – increasing the permissible axle loading for major commodities; improving wagon utilization by raising train speeds together with incentives to customers to consign full rakes of wagons, cutting out the need for marshalling enroute; rationalizing train examination procedures to reduce service delays etc.

Commenting on the topic, H D Gujarati, Director, Dedicated Freight Corridor Corporation of India (DFCCIL), said, “DFC will be a game changer in the transport and logistics sector. We are focussing on having a significant increase in the average speed of freight trains, volumetric capacity per wagon and double stack containers on the western corridor. We are in a process to introduce modern technology with will allow better maintenance, train operations with low operating cost. Dedicated freight Corridor will be operational by 2020.”

The last session of the conclave was concluded with the way forward where panellists discussed the various measure taken up for operational efficiency gains through technology and manpower upgradation. Infrastructure creation and capacity building will be crucial in the development of the sector and further development of the economy.

Automobile industry has been playing an important role in the economic development of the country, contributing 7.1 per cent to the GDP (gross domestic product). In India, the logistics cost is estimated to be around 14 per cent of the GDP,” said Vinod K. Dasari, President, SIAM and Managing Director, Ashok Leyland.

“We are keen to find out alternative ways like railways and waterways which will bring the advantage of lesser emissions and also add a safety factor.”

Dasari spoke at the third automotive logistics conclave – ‘Optimizing operational efficiency in automotive logistics’ which was organised here.

The automobile manufacturers body further said that road transport has played a pivotal role in the growth of India’s automotive industry, however with increased volume, alternate modes have become extremely critical.

“At present more than 95 per cent of vehicle movement in India is through road transport,” said Prem Verma, Chairman, SIAM Logistics Group and Chief Executive Officer of TML Distribution Company.

“With the automotive industry expected to grow at a double digit rate in the next decade it is imperative that the reliance on road transport should be minimized and considerable emphasis be given to other modes like railways, inland and coastal shipping.”

SIAM added that government initiatives like logistics parks, standardisation of pricing, creation of better infrastructure and capacity building will help bolster growth in the sector.