Industry wary of rate revision for transport of vehicles via Railways

NEW DELHI: Road transport has traditionallybeenthedominantmode of transport to ferry the vehicles from the manufacturing hubs to various destinations in India due to its flexibility and accessibility. Gradually, automakersareshiftingtorailwaysto carrytheirvehiclesfromthefactories to market destinations mainly to cut logistics cost, meet sustainability targets and comply with emission norms. This also allows them to reduce the transit time, ferry larger volumes of vehicles in one go and ensuresafetyduringtransportation.

Chetak Group, which has been in the industry for over four decades, is also considering to venture into The company caters to auto OEMs including Maruti Suzuki, Tata Motors, Hyundai, JCB, Kia,

Honda,amongothers.

The rail freight rates have also remained stable for the past 10 years, which has been a major support for the industry. However, the Ministryof Railways has revised the rates of haulage charge, increased the freight by 20% for the movement of Bogie Covered Autorake Double Decker Wagon (BCACBM) from the current financialyear.

“Automobile manufacturers have internal targets for utilization of railways and have been working towards achieving that. But with this rate revision, manufacturers may need to re-look at their targets and might shift their volumes to other modes of transportation,” Rajesh Menon, Director General, Society of Indian Automobile

Manufacturers(SIAM) said.

“Automobile sector was not anticipatingsucharevision.Rather,a revision in a phased manner would have been more appropriate, year-on-year basis, for business planning,”hesaid.

Industryexpertsbelievethatsuch a rate revision has come up at a time whentransportationviarailwayrakes was increasingly becoming a preferred mode of transportation. This rate revision may serve as a dampenerinthegrowth.

Bal Malkit Singh, ChairmanCore Committee & Former President,AllIndiaMotorTransport Congress (AIMTC) said that the 20% revision in rates signifies that the current freight structure is not viable inthelightofrisingoperatingcosts.

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