The ideal track to run India’s logistics system

Source: The post is based on the article “The ideal track to run India’s logistics system” published in The Hindu on 10^th March 2023.

Syllabus: GS 3 – Infrastructure

Relevance: concerns associated with the railway’s logistics services

News: The Union Budget 2023 has doubled the PM Gati Shakti National Master Plan to States from ₹5,000 crore to ₹10,000 crore, and has announced an outlay of ₹2.4 lakh crore for the Indian Railways.

This will help Railways to play an important role in enabling a coordinated and integrated logistics system.

What is the preferable mode of logistic transport in India at the present?

At present, 65% of freight movement is done by road transport due to the convenience roads offer for logistic movements.

However, this has also increased the burden on roads with increased pollution and high logistic costs (almost twice that of railways).

Therefore, it is necessary to adopt railways as a mode for cargo movement. This will improve India’s logistics competitiveness. 

How are the Indian Railways’ logistics services compared with the world?

Globally, countries are heavily investing in advanced rail infrastructure for quick and low-cost container movement.

For example, China uses special trains to carry containers that connect significant ports and has dedicated rail lines to move container traffic and planned double-decker container carriages for greater efficiency.

The Indian Railways are also upgrading their infrastructure through the PM Gati Shakti National Master Plan. However, these are significantly lower than other countries such as the United States and China.

What are the problems faced by the Railways in its freight services?

First, the increased transit time by rail and pre-movement and post-movement procedural delays freight movement by rail.

Second, the railways also lack necessary terminal infrastructure, maintenance of good sheds and warehouses, and uncertain supply of wagons.

Third, the absence of integrated first and last-mile connectivity by rail increases the chances of damage due to multiple handling and also increases the inventory holding cost.

What can be done to improve freight service by the Railways?

First, it needs to improve infrastructure with proper policy tools.

Second, private participation in the operation and management of terminals, containers, and warehouses can be encouraged.

Third, a special entity can be established under the railways to handle intermodal logistics in partnership with the private sector. This will help in addressing the first and last-mile issue faced by the railways. 

The entity could function as a single window for customers for cargo movement and payment transactions.

Fourth, the railways can introduce an Uber-like model for one of the two cargo wagons, attached to each passenger train. This will enable customers to book the wagon using an online application.

This could directly increase freight traffic without any additional investment in infrastructure.