The Minister of Railways Shri Suresh Prabhakar Prabhu proposed three solution sets for reversing the trend of declining modal share of freight trains – expanding the freight basket of Indian Railways, rationalising the tariff structure and building terminal capacity.

The freight basket of Indian Railways is dominated by 10 bulk commodities which enjoy a share of around 88%. Indian Railways should look beyond these to expand revenue base. A full-fledged market study is being undertaken and detailed supply and demand scenarios, service level and infrastructure requirements will be assessed so that an action plan to re-capture that traffic through either containerization or new delivery models e.g., Roll-on Roll-off, will be developed and implemented.

Network capacity limitations do not allow for running of time-tabled freight trains but from this year a time-tabled freight container, parcel and special commodity trains will be started on a pilot basis.

He also said that the Container sector would be opened to all traffic barring coal and specified mineral ores and part-loads would be permitted during the non-peak season. All existing terminals/sheds would be granted access to container traffic, where considered feasible.

He said that the current tariff structure of Indian Railways has led to out-pricing of freight services. A review of tariff policy will be undertaken to evolve a competitive rate structure vis a vis other modes, permit multi-point loading/unloading and apply differentiated tariffs to increase utilization of alternate routes. The possibility of signing long term tariff contracts with our key freight customers using pre-determined price escalation principles will be explored which would provide predictability of revenues to Indian Railways and of costs to customers.

Container sector opening to most traffic will be piloted, enabling time tabled freight trains and tariff reform. Diversify freight traffic through containerisation and alternative delivery models after a market study; pilot time tabled freight container, parcel and special commodity trains; open the Container sector to most traffic except coal and specified mineral ores with part loads in non peak seasons and terminal access as feasible; and undertake a review of tariff policy to allow multi point loading/unloading, differentiated tariffs and explore long term tariff contracts with pre determined escalation.