Indian Railways targets parcels market

About 750 of IR’s more than 7 000 stations currently provide a parcels facility, and in the future customers will be able to send parcels from the 150 000 post offices across the country. Tariffs will be fixed by the Railway Board according to weight and distance.

Dedicated parcels trains would run to timetables between pairs of major hubs, based on a network of around 100 services which was established during the Covid-19 lockdowns in 2020.

New services will then be launched on routes with high potential for parcels traffic, mainly serving second and third tier cities that have become major destinations for goods from e-commerce marketplaces.

IR will provide India Post with space for aggregation centres near existing parcel offices at major stations. Parcels will be grouped into boxes and pallets for loading onto parcel trains. Existing parcel vans will be modified so that trolleys can be rolled on and off, and scissors trolleys acquired to assist loading.

Working with India Post is a departure from IR’s usual policy of developing freight services alone. The aim is to bring a new door-to-door service mindset, with each partner operating according to its strengths to provide an effective product.

IR has traditionally focused on bulk goods. It earning more than Rs1·4tr by carrying over 1·4bn tonnes of freight in FY2022, but its earnings from small freight and parcels were small at Rs20bn in an estimated Rs250bn national market for parcels.

IR has made previous sporadic efforts to increase parcel traffic by running dedicated trains or attaching vans to passenger services, but these suffered from a lack of capacity and lukewarm internal support. However, IR now sees opportunities from the growth of e-commerce, with shipper looking for more environmentally friendly transport options.

This will require a change to previous IR polices which treated goods such as sanitisers, mobile phones and other electronic devices as hazardous and susceptible to fire, and IR is now looking at packaging and safety guidelines adopted by airlines.