Railways registering ‘steady growth’ in freight loading, earnings in FY21 to be higher than FY20: CRB

Freight loading has substantially picked up in the month of June, indicating an uptick in economic activity, Railway board chairman VK Yadav said yesterday (19th June 2020). Movement of items from the core sectors like coal, cement, fertilizer as well as food grains have been the key drivers for this growth.

“Freight traffic has started picking up. In June (till 17th), it is more than 90% (as compared to last year). Movement of (industrial goods) cement, coal, fertilizer, steel, is picking up. If you compare it with April and May, movement of these commodities are picking up. We are moving to normal loading pattern slowly,” Yadav said.

“Demand of coal has picked up due to increase in power generation,” he said.

Indian railways freight earnings declined by over one-third in April and May, as the coronavirus-led lockdown brought the economy to a standstill. In April-May, earnings from movement of goods declined 38% year-on-year to ₹13,436 crore, with traffic volume down 28% during the to 149 million tonne (MT).

In May, freight earnings fell from ₹11,043 in the year-ago to ₹7,437 crore. In terms of volume, it fell 21% year-on-year to 82.6 MT. However, movement of goods picked up substantially, as compared to April, when freight traffic was 65 MT and revenue was ₹5,999 crore.

Movement of food grains have picked up substantially, as railways continued facilitating transportation of essential goods across the country, despite the lockdown. In May, food grains revenue grew over 50% year-on-year to ₹1,177 crore.

“In the coming months, we will able to catch up with in the freight segment.” he said.

Yadav said that he is upbeat about the national transporter’s freight revenue in the current fiscal. “In the freight (business), we will be able to earn more than last year. I don’t see any problem in revenue from freight,” he said, adding that there could be some uncertainty in the passenger earnings segment due to the imposition of the lockdown. Besides, railways is yet to resume all passenger train services in full swing.

Revenue from freight is crucial for the national transporter as it has a direct impact on its operating ratio. According to the budget estimates, freight earnings will be at ₹1.47 trillion in 2020-21.