Railways defers 15% freight surcharge, ups number of rakes for auto sector

The railways has deferred its busy season surcharge of 15 per cent on freight and hiked the number of rakes to be provided for the auto sector in a bid to increase freight loading, which is likely to take a hit due to the economic slowdown.

The national transporter on Thursday announced that it was suspending its busy season surcharge of 15 per cent, which is levied between October 1 and June 30, for the current season.

"Considering the current economic scenario, to give a boost to the industry and freight, the railways has taken measures to facilitate industry, especially in reducing rail transport cost," Railway Board Member (Traffic) P S Mishra told reporters.

Additionally, a further waiver of 5 per cent will be given on loading mini rakes or smaller parcel size.

For the beleaguered auto sector, which is looking to cut costs, the railways has decided to offer more rakes for the transportation of automobiles.

Earlier, it used to provide eight auto rakes, which has now been hiked to 26 and the national transporter has plans to provide as many as 50 rakes to the sector to transport their goods by this year end.

"This is being done on the request of the auto sector," Mishra said.

In fact, the railways is hoping that this would increase its present share of two per cent in loading auto freight to around 8-10 per cent by end of this fiscal, successfully moving part of the sector away from roads to railways.

"On the industry's request, the railways is also working on a special wagon design for transportation of four wheelers as well as two wheeler "as we expect to get more traffic from this sector," he said.

He also said that while the railways has seen a slowdown in freight traffic in some sectors such as coal, with the waiving of surcharges, the volumes might go up.

Mishra also said railways has also come out with a scheme for round-trip charging on container traffic under which the haulage charges for 0-100 km slab will be charged for total to and fro movement, instead of charging for 0-50 km slab each way which will come out to be about 35 per cent cheaper per twenty-foot equivalent unit (TEU) for the complete round-trip.

"We have not see any negative impact till now. In the first five months of the current fiscal we have loaded more freight that last year... but the growth has not been at the leave we had expected."

In the first five month of the year (April-August), the railways hauled 500 MT on freight, but major chunk of growth usually comes in the second half of the year, Mishra said.

In 2018-19, the railways transports 1223 million tonnes of freight, earning revenues of about 1.25 lakh crore. Mishra said he expects to surpass both the volume and revenues numbers this year.

However, the growth in revenues is estimated to be in single digit he said.