Intermodality, an approach towards improving rail freight transportation: case of Delhi, Mumbai freight corridor

Abstract

In India, movement of freight can be found with highest1 share in roadways while the share of railways and waterways is declining2 over past many decades (Niti Aayog, 2018). Even the cost of freight movement by road is INR 2.58/ton–km as compared to INR 1.41/ton–km for rail and INR 1.06/ton–km for waterways, the former is most preferred (NTDPC 2014). It is because the alternative modes have low reluctance in competing with door to door service of roadways and poor efficiency in the whole supply chain. Since, railways and waterways are considered to be green both in their practices and the externalities they impose to the environment and society, increasing its share holds the key for overall freight improvement. To achieve the same, Indian government has proposed projects like Dedicated Freight Corridor (DFC) 3 with Ministry of Commerce and Sagarmala4 with Ministry of Shipping. While, both the projects will overcome current loopholes in freight industry by reducing logistics cost and time for EXIM and domestic cargo movement, they will enhance the overall efficiency and allow modal shift towards green modes. But, managing the same is also a big challenge either in terms of infrastructure, coordination or getting the requisite load for targeted volume. While railway is known for goods movement within the country, shipping has provided opportunity for international trade. If we discuss on freight movement along various nodes in the country, we may conclude that the current practices in Indian railways is in a very bad shape. Though the highest revenue is collected from freight rails, the services for the same is very deprived. The situation has hampered both its competitiveness and the overall demand as compared to other freight options. In today’s scenario, the country is fourth largest carrier of rail freight globally with logistics sector growing at CAGR of 10.5% and expected to reach about USD 215 billion in 2020 (NITI Aayog, 2018). Freight transport accounts for 7-8% of global carbon emissions, and is one of the main contributor to global warming. Out of the total cost incurred under various segments of logistics in India, transportation accounts highest share with 35% followed by warehousing, packaging and losses at 30% (Economic Survey Report 2018-19). The demand for freight transport with lower logistics cost and dwell time will always escalate. It is perceived that the average vehicle load is low and numerous vehicles run empty on daily basis. The external costs in transport are typically born by the environment and society as a whole. Thus, better fleet management practices with utilization of green vehicles to reduce truck movements and related emissions are essential. External cost formalization tools are necessary to be adopted to cut long road haulages and switch road freight to greener fuels. Intermodal approach can play a vital role where the movement of goods are carried out using successively two or more transport modes without handling of goods themselves in changing modes (Stölzle and Hoffmann 2006). The concept promotes use of multiple transport modes in a flexible, dynamic way and induce modal shift towards more environmental friendly modes like rail or inland waterways, without compromising service quality and responsiveness. Under this integrated service design, depending on specific delivery time requirements and availability of modes, the most appropriate mode is selected to improve service levels and increase utilization of transport means. In addition, the innovative technologies allow bundling of cargo flows, mode free bookings, flexible switching between modalities, and synchronization with empty vehicles. Concentrating on joint planning and coordination among different logistic players with real time information sharing, and by integrating moving resources (trains, trucks, barges), stationary resources (roads, inland waterways, rails) and customer demand, the approach has proven to be very effective in various European countries. Moreover, India is a fast developing country where freight plays an important role in providing a competent economy. To overcome the challenges in current freight supply chain, it is must that the sector is well organized. Making rail efficient and competitive with existing road prices and transit time can only paved the way for increasing freight share towards the same. The generalized cost towards green modes should be made cheaper to promote its higher usage. The potential measures should become part of national logistics plan to provide more accuracy to the current operational practices. Green practices should be encouraged and the challenges for the same should be dealt in an efficient manner. Regulatory and Incentive based strategies could help in achieving the same. The demonstrate the same, this study, as a testament has analyzed current freight practices in both road and rail freight modes, along a stretch of 1500 km on upcoming dedicated freight corridor. Via expert’s opinion, appropriate tools to cut long distance road haulages are selected and interview surveys from road and rail carriers are conducted. Average generalized cost for freight in both modes is compared and its influence on mode choice is assessed. Current challenges in rail freight transport is identified and measures for modal shift towards green fuels are suggested. Using stated preference approach, prospective modal shift is also deliberated. In the end, the study has ascertained the overall impact of reduction in road haulage and modal shift towards low carbon transport modes. The impact is assessed in terms of emissions, vehicle utilization, total transport costs and lead time. At last, suitable strategies to encourage rail freight transportation are recommended.