The transport infrastructure sector in India is witnessing a lot of action. More and more large infrastructure projects are rapidly being commissioned and implemented. This has had a multiplier effect on the entire economy, especially the logistics sector. Logistics has evolved from being concentrated on road freight to other modes such as air, rail and sea freight. Logistics and its importance has increased manifold with business players discovering the benefits of hiring outside, or third party logistics experts to manage the total flow of products, from raw materials to finished goods through a mix of multiple modes of transportation.
In the last decade, rail freight has been gaining significance. This can be judged by the fact that rail logistics occupies 30 per cent of the transport market in India. Eight-nine per cent of rail freight traffic is contributed by eight major commodities - coal, fertilisers, cement, petroleum products, food grains, finished steel, iron ore and raw materials to steel plants. In early 2006, when the railways announced its move of privatisation of container operations, the logistics industry was set for a roll as private sector received the first major opportunity
to invest in the railways that was controlled by Container Corporation of India (Concor). With the country's booming export-import trade, the containerised movement of cargo by rail was supposed to be the next big thing in terms of logistics. It was expected that the railways would take away share of business enjoyed by the road freight sector.
However, industry analysts believe that the result has not been as expected. Lack of infrastructure like freight stations—container freight stations and inland container depots—where cargo consolidation and deconsolidation take place, are some of the reasons cited for disruption of plans of private players. Congestion on the rail network is also a key factor in new players not investing in container trains.
First, it is important to understand that the privatization of container trains in isolation cannot boost the rail freight business. There are a host of allied factors including supporting infrastructure, reduction in user fees etc. that would need to be introduced. Companies who have not invested in container trains are still offering rail based solutions to customers through existing tie-ups with Concor. For example, TCI has tied up with Concor to provide comprehensive rail-road based 'door-to-door' logistics and warehousing' services for all categories of customers.

No threat to road freight
Second, the privatisation of container trains is unlikely to impact the road freight business. This is because of a host of reasons. Road freight has the advantage of its 'Last Mile Service'; it offers both pick-up and delivery at the customers' premises. In the case of railways, since it involves multiple handling, resultantly there are delays. In the present scenario, consumers are extremely time-sensitive and particular. Due to a plethora of options available, they want the best product, at the best price at the right time and place. Road transport is a more controlled and portable medium.
One of the most critical aspects where surface road transport scores over railways is that of pilferage. 'Skillful pilferage' is still rampant in railways while it is negligible and very often controlled in the case of surface road transport.
The railways, most importantly, lack in providing an integrated transportation and delivery solution to customers. This is because there is absence of a seamless integration between the railways and the postal department. Surface road transportation, on the other hand, pioneers in offering not just goods transportation but an all-encompassing solution that includes bulk primary transportation, intermediate storage, bulk-breaking and express distribution of smaller consignments. As businesses seek to gain competitive advantage through cost cutting measures, this becomes a vital aspect of transportation. Moreover, railways are economical where over 800 km to 1,000 km of distance is involved.

Intermodal transportation
India is an important and growing sourcing, manufacturing and consuming market. To sustain the growth, Indian markets need to provide customers with inventory management capacity supported by quick, efficient and reliable inter-modal services that complement our global ocean transportation and logistics offerings for both inter-country and cross-country operations. Intermodal transportation reduces cargo handling and so improves security, reduces damages and loss and allows freight to be transported faster. In a way, a shipment can be made complete in all respects from one interior point in the country to another or from one country to another under single contract, single freight and single document. In the near future, inter-modal transportation will definitely emerge as a strong medium for carrying out inter-country and cross-country operations.
The railways ministry has already planned to introduce a slew of measures to help boost the containerised movement of cargo. It has already begun running double-stack container trains on diesel routes and is now looking at running them on electrified routes. The ministry has finalised plans for triple-stack container trains on electric routes for domestic movement of cargo. It is also planning to set up many more inland container depots and warehouses to meet the huge rise in railway freight traffic. To new container operators, it has already provided its old terminals to be used as ICDs until their own infrastructure is developed.
More importantly, the ministry hopes that the dedicated freight corridor would eventually sort out any congestion on the railway network due to the large number of private container trains plying on it. However, ground realities reveal quite a grim picture and there is need for a greater overhaul of the railway system before containerised movement by rail really catches on.