Indian Railways’ Freight Loading up 5% in April-Aug 2017

Coal accounts for 48% of the Railways traffic and 44% of its earnings profile. The demand for rakes from the domestic coal sector is way below the projected targets. However Rail freight, container volumes indicate significant rebound in trade in August: reports PhillipCapital India

KOLKATA: The Railways has seen nearly 5 per cent year-on-year increase in freight loading for the first five months of this fiscal (April to August) riding on growing volumes of cement, steel and iron ore traffic.

Steel cargo increased by 22.27 per cent to 22.62 million tonnes (mt) during April-August 2017 over the same period last year.

Iron ore loading saw a near 13 per cent y-o-y increase to 59.23 mt, while cement cargo grew by 12.60 per cent to 47.53 mt. Loading of foodgrains and containers has also gone up. The improved showing, however, came despite a 0.3 per cent drop in coal cargo to 215.86 mt, owing to reduced imports.

No growth in coal

Coal accounts for 48 per cent of the Railways traffic and 44 per cent of its earnings profile. According to Bajwa, while the loading of imported coal dropped, domestic coal loading increased. The demand for rakes from the domestic coal sector, however, is way below the projected targets. As against 238 rakes a day, Coal India Ltd is loading only 214 rakes a day, he said. “We hope the coal loading numbers will improve and we will be able to achieve the set target of 555 million tonnes this fiscal,” Bajwa told BusinessLine on the sidelines of the ‘mjunction’ organised coal markets conference. Fertiliser was the other major category that saw around four per cent decline in traffic, during this period, to 20.29 mt due to “less imports.”

The Railways invests nearly ₹131,000 crore to ramp up rolling stock (wagons), expanding track capacity through line doubling and improving the signalling system. According to Bajwa, by the end of 2018-19, the rolling stock (wagon) availability will increase by 10 per cent.

Container volumes at major ports increased 8.4% in August over a year ago, indicating a significant recovery in trade

Container volumes at major ports (in terms of 20-foot equivalent units) increased 8.4% in August over a year ago, indicating a significant recovery in trade. Due to the initial disruption caused by the introduction of the goods and services tax (GST), container traffic growth had slowed to around 2-5% in the earlier two months. Encouragingly, volumes at Jawaharlal Nehru Port Trust (JNPT), India’s largest container port, remained strong, clocking a growth of 9.1%, data compiled by PhillipCapital (India) Pvt. Ltd shows.

The Indian Railways freight traffic data also indicates a rebound in trade, though it is helped by a favourable base. Traffic in terms of originating tonnes expanded 7.7% last month, the fastest growth so far this fiscal year. The export-import (Exim) container traffic in terms of tonnage is up 19.5%. Domestic container traffic is up 16%, which is a positive surprise.

An analyst with a domestic broking firm says the data indicates continued market share gains by the railways. The recent rise in diesel prices may have helped tilt the cost curve in favour of the railways.

Nevertheless, these numbers should bode well for the national carrier and container train operators. Traffic not only gained momentum in August but growth so far this fiscal is also better than the year-ago period. Compared to 4.3% growth a year ago, container volume at major ports is up 6.4% so far this fiscal. Similarly, total rail freight volume is up 4.9% so far this fiscal, compared to a 1.4% drop in the year ago. Growth in container traffic on the Indian Railways is also significantly better than for the year-ago period.

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