Coal Freight Tariffs Are Being Tweaked By The Railways

Railway freight transportation refers to the use of railways and trains to transport cargo rather than people. As part of the logistics chain, a railway freight train, or goods transport train (International Union of Railways), transports freight on one or more locomotives on the railway between the carrier and the intended destination. From one country to the next, railway freight methods and economy differ. When it comes to tonnage or tonnage kilometers transported per unit of energy used, rail transport can be more efficient.




Rail transport freight can be more efficient than other modes of transportation when measured in ton-miles or tonne-kilometers hauled per unit of energy consumed. Bulk commodities (e.g., coal) often achieve maximum economies, especially when transported across great distances. However, rail shipments are less flexible than highway shipments, thus much freight is now transported by vehicle, even across vast distances. Transshipment fees are common when moving products by rail, especially when the shipper or receiver does not have direct rail access. These costs could be more than the cost of running the train, which is something that containerization aims to reduce.


Railways have changed its coal rail freight rates by including certain add-on expenses into the standard tariff, resulting in a slight increase, with three months till the fiscal year ends.


The 15% busy season premium, which was added to the railway freight rate for nine months of the year (April to June and October to March), has been absorbed into the new tariff structure. The amended tariff table also includes a 5% development charge. As a result, no "lean season" coal tariff exists any longer. All year, the standard rate will apply.


When compared to the previous rates computed with the two add-on charges, the new coal railway freight rates, which go into effect on January 15, have a minor rise in some distance slabs. According to sources, if Railways does not implement a lean-season "relief" in coal rates between July and September, the entire annual impact on clients' transportation bills might be over 5%.


 According to the new regulation, the lean season, when coal customers do not have to pay the add-on charges, will now be charged at rates similar to those charged during the busy seasons. That is Rs 198.70 in the new tariff system. The rate does not see a flat increase and is dynamic based on multiple distance slabs, as is the tariff policy on freight. As a result, there is a slight drop in some slabs. 

Between kilometers 1 and 3500, the tariff is separated into several distance slabs, with different railway freight rates for each. This fiscal year, the coal trade has increased dramatically. The freight transporter uses up to 50,000 wagons every day. By the conclusion of the current fiscal year, it hopes to have carried a total of 1150 MT of freight, which would be a new high.

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