Towards a Greener Future of Freight

The latest assessment report of the United Nations Intergovernmental Panel on Climate Change (IPCC) has reinforced the need for India to declare and implement stronger carbon emission reduction targets, especially in transport, one of India’s biggest sources of emissions. Currently, 59% of the freight movement in India is through road. According to RMI’s roadmap for clean goods transportation , CO2 emissions from freight transport alone are expected to increase over five times – touching 1214 million tonnes in 2050 from 220 million tonnes in 2020.

Though India’s foremost effort to decarbonize the transport sector – the electrification of road vehicles – is being pursued vigorously by both central and state governments. And since there is no cost-effective EV option for heavy trucks, especially those engaged in long haul freight, this initiative is only applicable to passenger and smaller freight vehicles.

Any low-carbon freight transport option will need massive investment in supporting infrastructure, as well as a long gestation period. Lest we run the risk of being locked into an expensive and sub-optimal technology, we should consider leveraging a current asset: India’s massive railway network.

As India’s most environmentally friendly mode of transportation, railways will play a vital role in the country’s decarbonisation efforts. The importance of rail has already been highlighted in India’s Intended Nationally Determined Contributions (INDC) . The government’s commitment to increase the market share of rail in-land transport to 45 per cent by 2030 has been crystallised through increased investment in capacity augmentation projects. However, railways’ freight market share has fallen from 39% in 2000-01 to 26% in 2017-18. Once the transporter of both bulk and non-bulk commodities for short, medium and long distances in the pre-1980s era, the Indian railways has shifted focus almost exclusively to bulk commodities, based on the belief that this was where railways had a comparative advantage.

This setback allowed the trucking industry to fill up the gap by offering door-to-door service. Additionally, the railway’s distance-based rates, inflexible marketing policies and capacity constraints on all major routes made it incapable of attracting additional freight business. A legacy of inflexible rules, departmental issues, and slow customer redressal eroded its market share. Therefore, whilst the railways role as a freight provider devolved, trucking grew to eventually eat up the bulk traffic.

The railways, however, have now matured into an era of business-friendly policies, adopting a two-pronged focus: retaining traditional customers and improving marketing policies to attract newer commodities such as FMCG and e-commerce. For example, the Long-Term Tariff Contract (LTTC) policy, is aimed at customer-centric solutions to win back its traditional customers - bulk commodity owners such as cement which saw a slight increase in the rail freight share after the introduction of this policy.

Other policies, including the Special Freight Train Operator (SFTO) and the Automobile Freight Train Operator (AFTO) schemes, are aimed at bringing in investments from private players and increasing the market share in non-conventional commodities through special purpose and high-capacity wagons. Fly ash and automobile traffic have gradually started to move by rail. Hot Rolled (HR) steel coils, which were initially being transported via road, are returning to railways in specially designed wagons. Three imperatives can enable the railways to have a more customer-oriented approach in the business of freight.
 

Firstly, the railways must build on recent successes to roll out more inclusive commodity-specific policies. Stakeholder consultation must become an essential feature to ensure that policies continue to be aligned to customer needs, in marked contrast to the bygone era of regulatory sluggishness.

Secondly, the railways should also concentrate on using its existing infrastructure by massive mechanisation of handing facilities at loading and unloading terminals to reduce detention time and damage to goods. Other facilities must also be put into play to enable swift clearance of carried goods. Given that abroad policy specifying one-size-fits-all guidelines may not address a specific issue being faced at a particular terminal, field officers should be given more authority and financial powers for expanding facilities at terminals for handling different commodities.

Thirdly, speedy and guaranteed transit time with little uncertainty as well as timely information flow to the customers is essential. It is important to bring in non-bulk traffic aggregators who act as collaborative partners. It would be crucial to provide facilities to them particularly at terminals to ensure minimal detention and quick transit in specially designed wagons. Providing door-to-door service particularly for parcel traffic either by partnering with the postal department or by bringing in handling contractors/aggregators at terminals can help railways to attract a sizable market share in this segment. Increasing railway share in all segments of freight traffic, bulk or non-bulk, is essential for cost-effective freight decarbonisation. It would also reduce road congestion and air pollution. For optimum utilization of its existing infrastructure, railways must reorient their marketing policies and ensure better multi-modal integration.

While the steps taken by the Indian Railway are in the right direction, they need to take more focussed action in collaboration with existing and potential customers.

References - 

- Palak Passi, Research Associate Centre of Sustainable Mobility, The Energy and Resources Institute (TERI)