Railways reduces discounts on haulage charges for container movement

Rail ministry says the reduced rates of 15% per twenty-feet equivalent unit (TEU) for empty containers and empty flat wagons, as against the earlier 25%, will apply till July 31

2 min read Last Updated : Apr 22 2022 | 10:42 PM IST

The Ministry of Railways will scrap the 5 per cent discount on haulage charges for the movement of loaded containers from 1 May, along with a reduction in the discount rate offered on movement of empty containers.

The ministry, in a circular, said that the reduced rates of 15 per cent per twenty-feet equivalent unit (TEU) for empty containers and empty flat wagons, as against the earlier 25 per cent, will be applicable till July 31.

Haulage charge is the price of ferrying containers from ports to inland container depots. There are two standard sizes of containers — TEUs and forty-feet equivalent units (FEU).

The discount on haulage for loaded containers was introduced in August 2020 in the backdrop of the COVID-19 pandemic, which had left several sectors in an acute financial crunch. In December that year, the ministry had waived the charges completely for empty containers and flat wagons.

"The objective of these discounts was to encourage the container segment of freight during the COVID-19 pandemic. With record loading being seen in the last financial year, and the container loading showing expected growth, these discounts are being gradually reduced," a railways ministry official said.

The national transporter recorded 1418 million tonne (mt) of freight in the previous financial year. With a plan to acquire 30,000 wagons in the current year and an uptick in demand, railways is aiming for 1700 mt of freight loading in 2022-23, almost 15 per cent higher than Budget estimates.

Its earlier discount on empty container and flat wagons was seen as a move to boost the rail container segment and also help in diversifying railways' freight basket with more finished goods, which is currently dominated by raw materials. Containerisation of goods is seen as an effective transportation method.