X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Logistics: A look at the rail freight sector - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Sep 4, 2009

    Logistics: A look at the rail freight sector

    Rails are owned and operated by Indian Railways (IR), a government undertaking. Till 2007, Container Corporation was the only player who operated container trains. While in 2007 container rail freight services were privatized, Concor, which is a government undertaking still remains the dominant player. As per Wikipedia, Indian Railways is one of the largest and busiest rail networks in the world spread over more than 63,327 kilometres covering 6,909 stations. It is also the world's largest commercial or utility employer, with more than 1.4 m employees. It transports nearly 6.6 bn passengers per year and over 700 m tonnes of freight per year. The freight segment accounts for nearly 70% of the railway's revenues.

    The rail freight segment has grown at an annual growth rate of 8% and is likely to continue to grow at the same rate. While the freight earnings have grown at an annual growth rate of 12%.

    Source: Ministry of Railways

    Traditionally railways have favoured carrying passengers over hauling freight that led railways to steadily lose freight share to roadways. However, reforms such as privatisation of container freight services have boosted the growth in this segment.

    What has driven growth?
    The Container Freight Stations (CFS) and Inland Container Depots (ICD) were privatized in the 90s while in 2006, the government of India awarded fourteen licenses to private players to operate rail container services across all routes in India. Private players need to have their own terminals i.e. ICDs with rail sidings to load and unload containers. Opening doors to the private sector enabled infrastructure to be built up and increased share of the container cargo movement. The Railways' share in transportation was as high as 88% in the mid 50s which steadily declined below 30% prior to privatisation. Rail logistics now account for nearly 30% of the transport market in India.

    The road ahead...
    The privatization efforts in areas such as catering, wagon ownership and leasing and joint ventures for rail infrastructure projects have so far been limited in scale and scope. However, to catalyse growth further involvement of private players is necessary, which is something the Indian Railways has recognised too. IR prefers to liberalize its policy to sustain the productivity, efficiency and cost effectiveness. For the same it plans to sign joint venture agreements or leverage upon private capital through Public Private Partnerships (PPPs).

     

     

    Equitymaster requests your view! Post a comment on "Logistics: A look at the rail freight sector". Click here!

    1 Responses to "Logistics: A look at the rail freight sector"

    Ravi Shah

    Sep 4, 2009

    Very insightful article on the rail freight sector logistics. Which are the other players, besides Concor?

    Like 
      
    Equitymaster requests your view! Post a comment on "Logistics: A look at the rail freight sector". Click here!
     

    More Views on News

    Container Corporation: A Weak Quarter (Quarterly Results Update - Detailed)

    Dec 7, 2016

    Container Corporation of India Ltd has announced results for the quarter ended September 2016. The company has reported 8.2 % year on year (YoY) decline in sales, while bottom-line is down 31.9% YoY.

    Container Corporation : A disappointing quarter (Quarterly Results Update - Detailed)

    Aug 17, 2016

    Container Corporation of India Ltd has reported a decline of 6% and 14% in the topline and bottomline respectively for the quarter ended June 2016.

    Concor : A muted quarter (Quarterly Results Update - Detailed)

    Nov 9, 2015

    Container Corporation of India Ltd has reported 11% year on year (YoY) growth in the topline for the quarter ended September 2015 while the bottomline for the quarter grew by 21% YoY.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    COMPARE COMPANY

    MARKET STATS