Home / News / India /  Railways plans to ride e-commerce boom

NEW DELHI : Indian Railways plans to run dedicated parcel trains on specific routes to capture a chunk of goods shipped by online marketplaces, two people aware of the development said. The national transporter hopes the new service will help it regain some of the non-bulk freight business that has moved to roadways over the decades.

To start with, the railways will regularize 100-odd dedicated express parcel trains launched during the covid lockdowns in 2020. This will be followed by new Parcel Express services on routes with high potential for small freight traffic, mainly covering tier-II and III cities that have become major destinations for goods from e-commerce marketplaces.

“Railways’ parcel service had seen immense growth last year when revenue from this segment touched almost 300 crore in FY22, up from roughly 140 crore in the previous year. This has largely come from Kisan Rail, which transports perishables to different parts of the country. The potential is immense also from growing e-commerce players that are growing their revenues and also looking at environment-friendly and assured transport services of the railways," one of the two people cited above said. “We have acknowledged this and decided to first regularize the parcel express trains launched to transport essentials during the covid lockdown in 2020. More dedicated and time-table-run parcel trains will be introduced subsequently," the person said on the condition of anonymity.

Questions sent to the railway ministry remained unanswered till press time.

The railways’ share in freight traffic has come down to below 30% from over 70% levels post Independence. It used to run trains for small cargo till the 1970s, but the service was discontinued due to a lack of volumes and higher logistics costs. Since then, it has attached parcel vans to passenger trains when there is sufficient demand.

The railways plans to relax its parcel regulations through a new policy that will allow it to carry goods such as mobile phones, sanitizers, toiletries and a host of other electronic gadgets, which are among the prime sales for e-commerce players. These goods are currently prohibited from using railways’ parcel service, as old regulations classified such items as those that could catch fire. Now, the policy will be devised along the lines of the one followed by airlines, where such goods will be carried as parcels, adhering to strict packaging and safety guidelines.

The new parcel service will be a big shift in freight policy for the national transporter, focusing on revenue-generating bulk categories such as coal, steel, iron ore, foodgrain, cement, petroleum products and fertilizer. Railways carried over 1,400 million tonnes of freight, earning over 1.4 trillion gross freight revenue in FY22, but its earnings from small freight or parcel services remain minuscule. It is this segment that had largely shifted to roads due to the absence of proper services from the railways. With covid, time-tabled express parcel trains made a comeback, and this service would now be expanded to convert railways into a full-fledged logistics service provider.

In its new avatar, the parcel service will also provide door-to-door services, picking up goods from the suppliers’ premises and delivering them to customers at their destinations. It will also provide assured timely deliveries with a partial or full refund of charges in case of delay in deliveries.

“The revamped parcel service is aimed to make railways a complete logistics player, aiming to retake a lot of its business that shifted to roadways," said a railway ministry official, the second person cited earlier.

The parcel service will also be supported by the railways’ Parcel Management System (PMS) application installed at over 50 stations. The PMS has been developed to provide details of the status of consignments booked by the sender at each event, like booking, loading, unloading and delivery on the Indian Railways network and facility to calculate the freight for booking of items. The new service will operate between cities such as Delhi, Mumbai, Kolkata, Chennai, Hyderabad, and Bengaluru, several state capitals and industrial hubs, apart from the north-eastern region, covering large parts of its 68,000km network.

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