Indian Railways' slow growth in container volume raises concerns for Q4FY25

Despite Indian Railways reporting a 3.1 per cent Y-o-Y rise in container volumes for the nine months, this growth lags behind the 10 per cent Y-o-Y increase in total Indian port volumes

Indian Railways is experiencing sluggish growth in container volumes, raising concerns for container train operators (CTOs) in the fourth quarter of FY25, reported ANI, citing a report by Nuvama.

 

For FY25 so far (April 2024 - February 2025), Indian Railways handled 80.6 million tonnes (mnt) of container cargo, reflecting a modest 4.1 per cent year-on-year (Y-o-Y) growth. However, EXIM container volume growth remains weak at just 0-2 per cent Y-o-Y. This signals ongoing challenges in the sector despite estimates suggesting that India’s imports and exports increased by 9 per cent Y-o-Y in value terms between April and November 2024. A sharp 10 per cent decline in November 2024 further highlights concerns about sustained weakness in the industry.

 

In February 2025, Indian Railways managed 7.11 mnt of container cargo (EXIM + domestic), remaining flat Y-o-Y but dropping 12 per cent compared to the previous month.

Railways losing market share to ports and road transport?

 

While Indian Railways’ EXIM container volumes grew by less than 3 per cent Y-o-Y in the first nine months of FY25, leading ports — including major and private ones — reported a strong 9 per cent Y-o-Y growth in the same period. This suggests a higher share of trans-shipment cargo, reducing the reliance on rail transport. Additionally, changes in cargo origination closer to ports may have contributed to the sluggish rail growth.

 

Despite Indian Railways reporting a 3.1 per cent Y-o-Y rise in container volumes for the nine-month period, this growth lags behind the 10 per cent Y-o-Y increase in total Indian port volumes. Analysts suggest that while Indian Railways may be losing market share to road transport, other factors—such as trans-shipment cargo and shifting cargo positioning — may also be playing a role.

 

Dedicated freight corridor yet to show significant gains

According to the Nuvama report, the Dedicated Freight Corridor (DFC) connection to Mundra and Pipavav ports has been operational for three years, but its impact remains limited. Stakeholders, including CTOs, Indian Railways, and port operators, have seen only modest benefits from the corridor so far.

Performance of key container train operators

• Different container train operators showed varied performance during the first nine months of FY25:
• Concor saw a 2 per cent Y-o-Y increase in originating container volumes, suggesting a slight market share recovery.
• Gateway Distriparks reported a 5 per cent Y-o-Y decline, indicating operational challenges.
• AdLogistics stood out with a 10 per cent Y-o-Y growth, gaining market share despite the weak environment.
• Adani Ports saw a 6 per cent Y-o-Y decline in rail volume to 50,000 TEUs, marking its first drop in 18 months.

 

[With inputs from ANI]