Indian Railways spurred bulk cement transport by cutting freight charges to 85 paise per GTKM with empty return discounts. The move makes rail more competitive than road, attracting cement firms to use its tank container services.
New Reforms Spur Bulk Cement Movement
Efforts by Indian Railways to increase loading and promote rail-based movement of bulk cement in tank containers are bringing positive results. Many cement companies have approached CONCOR for the movement of bulk cement in tank containers, according to a release. CONCOR is also facilitating the installation of silos at its terminals for bulk cement handling and storage.
To deepen the reforms and make its schemes more attractive, Indian Railways recently reduced the charge on a GTKM basis from 90 paise to 85 paise per tonne per kilometre. This, along with discounts for empty return movements to the originating terminal on a GTKM basis, is making rail movement of bulk cement in tank containers significantly more competitive than road.
Positive Impact on Trade and Efficiency
The response of the trade to this innovative charging scheme has been very good. This scheme will result in a reduction in overall freight cost for bulk cement movement.
This will result in lower fuel cost and reduced emissions.
The reforms support faster turnaround and lower handling losses than bagged cement. It also facilitates the adoption of tank containers in bulk cement logistics, improving plant-to-market efficiency.
Overhauling Previous Charging Model
Earlier, Indian Railways was charging haulage on per TEU basis as per the distance slab for movement of bulk cement in tank containers with a graded discount on haulage in the empty return direction, i.e., 50% in the first year, 40% in the second year, 30% in the third year, 20% in the fourth year, 10% in the fifth year, and no discount from the sixth year onwards.
However, this basis of charging was found to be unattractive for cement producers and was acting as a deterrent to shifting bulk cement movement to rail from road. In order to increase loading and promote rail-based movement of bulk cement in tank containers, Railways brought reform in rates to make win-win situation for Railways and customers. (ANI)
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