Railways To Lower Steel Freight Rates For Steel Industry

The railways ministry has decided to restructure the freight charges for the steel industry in a way that would give the industry a rebate of 10 per cent.

The ministry has also decided to refabricate box wagons to reduce the unused space in the wagons loaded with steel coils. Unused space results in idle freight paid by steel industry and the new wagons will effectively bring down the freight charges further.

These are the offers made by the railway ministry following meetings with officials of Tata Iron and Steel Company and Steel Authority of India. The discussions was the offshoot of a workshop on the partnership between the railways and steel industry organised by the Confederation of Indian Industry on August 12.

 

" We would rather give rebate than loose freight from the steel industry. Steel freight is very important to us and the steel industry feels that railway transportation is costlier. We think some of the problems they face is genuine and have decided to tackle them", Shanti Narayan, member, traffic, in the railway board told Business Standard.

The railway ministry is aware that the steel industry is trying to cut costs to the extent possible in view of the slump in sales that it is going through.

This is the time that the steel industry might try to move more goods through road transport which is able to offer lower freight charges, something that the railways want to discourage.

The steel industry loads four steel coils weighing 48 tonnes in a box wagon.

It is not able to use all the space in a wagon while the railways charge for the full capacity of a wagon which is 56 tonnes. The industry has been complaining that it is forced to pay idle freight of 8 tonnes on each wagon, resulting in overall higher freight than road transport.

The railways have now decided to charge the steel industry for 51 tonnes whenever a wagon is used to load coils, thus saving the freight for 5 tonnes per wagon. But the steel industry will still have to pay idle freight for 3 tonnes per wagon.

The steel industry has changed the mode of loading coils from the vertical to the horizontal mode in recent years.

As the coils are cubic in shape, they need to be supported with special fillers when loaded in the wagons in a horizontal manner. These support fillers also consume space for which the steel industry has to pay.

The railway ministry has also offered to fabricate special wagons with rounded depressions on the floor, so that the coils can be fitted into the depressions. This will obviate the need for using fillers and resulting in a saving of space.

Space saving will also result in freight saving for the steel industry, although it will mean additional fabrication costs for the railways.