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optimal infrastructure, operational inefficiency, issues faced in first and last-mile connectivity, the role of private players, issues faced in multi-…

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TypeCommercial Circular
Topicfreight
CurrencyCurrency not verified

Summary

optimal infrastructure, operational inefficiency, issues faced in first and last-mile connectivity, the role of private players, issues faced in multi- modal transport, etc. Indian Railways has been taking several initiatives to address the challenges and boost the rail share, such as the special parcel trains for transportation of perishable goods and essentials commodities IMPROVING RAIL EFFICIENCY AND SHARE IN…

Text of the circular

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ff IMPROVING RAIL
EFFICIENCY & SHARE IN
INDIA'S FREIGHT TRANSPORT

IMPROVING RAIL EFFICIENCY and
SHARE IN INDIA’S FREIGHT TRANSPORT
Acknowledgement
This study was carried out with the financial support of NITI Aayog, Government of India, 
and conducted by Bureau of Research on Industry and Economic Fundamentals (BRIEF).
Disclaimer
Bureau of Research on Industry and Economic Fundamentals (BRIEF) has received the financial assistance under 
the Research Scheme of NITI Aayog (RSNA-2018) to prepare this report. While due care has been exercised to 
prepare this report using the data from various sources, NITI Aayog does not confirm authenticity of the data 
and accuracy of the methodology to prepare the report. NITI Aayog shall not be held responsible for findings or 
opinions expressed in the document. This responsibility completely rests with BRIEF.

Acknowledgement
We express our sincere gratitude to Niti Aayog for providing Bureau of 
Research on Industry and Economic Fundamentals (BRIEF) the financial 
assistance under the Research Scheme of NITI Aayog (RSNA-2018) to 
prepare this report.
We sincerely thank the Infrastructure Connectivity team at Niti Aayog 
for supporting us ever since we began this research and for proactively 
connecting us with relevant stakeholders.
We would like to specially thank Late Shri S.K. Saha, former Adviser; Shri 
Sudhendu J. Sinha, Adviser; Shri M. Vijayakumar, Joint Adviser and Shri 
S.M. Khan, Senior Research Officer for sharing with us their insights and 
providing us valuable feedback during the course of the research.

Contents
References	
107
Annexures	
111
1
CHAPTER 1: Scope and Overview	
13
Abbreviations	
7
Executive Summary	
9
CHAPTER 2: Background	
17
2
CHAPTER 3: Approach and Methodology	
23
3.1	 Multi-stakeholder Engagements	
26
3.2	 Data Collection and Compilation	
27
3
CHAPTER 4: As-Is Assessment	
29
4.1	 Baseline Trends of Movement by Rail	
30
	
4.1.1	 Freight Volume Forecast	
36
4.2	 Comparative Cost Analysis Road and Rail	
38
4.3	 International benchmarking and best practices	
44
	
4.3.1	 Logistics Performance Index	
45
	
4.3.2	Logistics Cost as a Share of GDP	
46
4.4	 Turning Crisis into an opportunity: Initiatives Taken by Indian 
Railways during Covid-19	
48
4
CHAPTER 5: Product Matrix and Sector Specific Case Studies	
53
5.1 The Product Matrix	
54
5.2 Case Study 1: Automobile	
61
5.3 Case Study 2: Cement	
69
5.4 Case Study 3: Food grains	
75
5
CHAPTER 6: Challenges and Reforms	
81
6.1	 Challenges in the modal shift to Rail	
82
	
6.1.1	 Operational Efficiency	
83
	
6.1.2	 Suboptimal Infrastructure	
84
	
6.1.3	 Lack of Integrated Connectivity (First Mile and Last Mile)	 86
6.2	 Roadmap for Reforms	
87
	
6.2.1	 Overall Recommendations to Increase Share of Rail in 
Domestic Freight	
91
	
6.2.2	Sector Specific Reforms	
99
6

7
Abbreviation
Detail
3PL
Third Party Logistics
AAR 
Association of American Railroads
ADB
Asian Development Bank
AFTO 
Auto Freight Traffic Operator 
CAGR
Compound Annual Growth Rate
CFS
Container Freight Stations 
CMA
Cement Manufacturing Association
CO2 
Carbon dioxide
CONCOR
Container Corporation 
CTO
Container Train Operator 
DFC
Dedicated Freight Corridor 
DFCCIL
Dedicated Freight Corridor Corporation of India 
EDFC 
The Eastern Dedicated Freight Corridor
EXIM
Export-Import 
FCI
Food Corporation of India 
FIEO
The Federation of Indian Export Organisations 
FMCG
Fast Moving Customer Goods
FY
Financial Year
GDP
Gross Domestic Product
GVA
Gross Value Added 
ICD
Inland Container Depot
INR
Indian Rupees
IT
Information Technology
JNPT 
Jawaharlal Nehru Port Trust
Kgs
Kilograms
Km
Kilometre
KMPH
Kilometre Per hour
LTTC 
Long Term Tariff Contract

8
IMPROVING RAIL EFFICIENCY AND SHARE IN INDIA'S FREIGHT TRANSPORT
MMLPs
Multi-Modal Logistics Parks 
MT
Metric Tonnes
NHAI 
National Highways Authority of India
NHs
National Highways 
NMG
New Modified Goods
NSSO
National Sample Survey Office
NTKM
Net Tonne Kilometre
OCR
Optical Character Recognition
OECD

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