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Rail Logistics

Indian Railways is the fourth largest railway network globally with over 1.14 lakh km of tracks and 7,500 stations. It carries over 30 million passengers and 2.8 million tons of freight daily. A World Bank study found logistics costs in India are among the highest globally at 14% of total value, compared to 6-8% in other developing countries. This is due to high congestion, transaction, and supply/demand factors. Indian Railways transports around 87% of fertilizers and 82% of iron and other ores produced in India. It is overseen by the Ministry of Railways and aims to modernize operations through various strategies and policies to boost capacity amid strong demand.

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186 views13 pages

Rail Logistics

Indian Railways is the fourth largest railway network globally with over 1.14 lakh km of tracks and 7,500 stations. It carries over 30 million passengers and 2.8 million tons of freight daily. A World Bank study found logistics costs in India are among the highest globally at 14% of total value, compared to 6-8% in other developing countries. This is due to high congestion, transaction, and supply/demand factors. Indian Railways transports around 87% of fertilizers and 82% of iron and other ores produced in India. It is overseen by the Ministry of Railways and aims to modernize operations through various strategies and policies to boost capacity amid strong demand.

Uploaded by

Yusuf Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Rail Logistics

overview

• Indian Railways is a departmental undertaking of Government of India, which owns and operates
most of India's rail transport. It is overseen by the Ministry of Railways of the Government of
India.
• Indian Railways has 1,14,500 km. of total track and about 7,500 stations . It has the world's fourth
largest railway network after those of the United States, Russia and China. The railways carry over
30 million passengers and 2.8 million tons of freight daily. It is the world's fourth largest
commercial or utility employer, by number of employees, with over 1.4 million employees.
• The freight segment accounts for roughly two thirds of railway’s revenues.
Freight operation

• Four things stand out in the business environment in which the Indian railways presently operate.
• They are:
• Indian railways is confronted with the changing pattern of industrial production and geography away from
traditional industries and clusters towards a more dispersed pattern embodying high value and low volume
manufactures.
• A transforming economy in India, which is shifting from a primary bulk commodity production system to a
specialized manufacturing system with increasing contribution from the services sector.
• A global economy which is getting highly integrated and where the options to source raw materials,
production source, intermediate finished goods and markets for finished goods can be varied and change
from one cycle to another..
• A growing and urbanizing population in India, whose transportation needs are driven by an affluence
leading to increased requirements of services.
COST OF LOGISTICS

• A World Bank Study conducted recently says that the Indian logistics cost is one of the highest in the
world. This study shows that as far as developing countries are concerned, these costs are 6 % to 8 % of
the total value of goods. In China the cost is estimated at 10 % of total value of goods. By comparison,
the cost of logistics in India is 14 % of the total value of goods. The freight costs for rail are quite high,
for example:
Three factors that are primarily responsible for the high cost of logistics
in India:

• Congestion cost : Congestion at ports, inland and roads have rapidly increased – thus directly
augmenting logistics cost and also resulting in overall high inventory cost as delivery time increases.
• Transaction cost : Administration costs including insurance and government taxes continue to be very
high. The logistics cost could rise further due to supply and demand factors.
• Demand and supply factors : The continued rise in container traffic is leading to increased traffic
congestion in the rail network, as exports and imports are growing 22 % to 25 % annually. The high cost
of terminal development along with relatively latest innovation in finalizing strategies result in only
moderate pace in the supply chain addition.
• There is also lack of proper rail infrastructure in the Class-B & Class-C towns. The lack of specific logistic
professionals is also hampering the growth.
Significance of IR

Power IR
IR transports
Agriculture Mining IR carries around
highest
IR carries carries around 90% of the
passenger
around 87% 82% of iron & coal
throughput in
of fertilizer other ores produced in
the world.
India
INDIAN RAILWAYS HAS TWO MAJOR SEGMENTS
• Indian Railways (IR) is:
• A departmental undertaking of the Government of India (GOI), which owns and operates most of
India's rail transport
• Overseen by the Ministry of Railways
• As of 2016-17, IR has a total route network of about 67,368 kms.
• It operates more than 22,300 trains daily
• It has 0.278 million wagons, 69,322 coaches and 11,461 locomotives
RECENT TRENDS AND STRATEGIES
STRATEGIES ADOPTED BY INDIAN
RAILWAYS
STRONG DEMAND AND POLICY
SUPPORT DRIVING INVESTMENTS

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