Freight incentives introduced over WR to increase loading and earnings

Western Railway has introduced various incentive schemes of Ministry of Railways, to boost the economic growth by attracting freight transporters to tie up with Railways for transportation of their goods & parcels

. Looking at the overall market scenario and based on the existing traffic pattern, such schemes results in win-win situation for both.

However, due to segregated rules available on Indian Railways Website, it becomes difficult for the stakeholder, especially for those who are presently not directly affiliated with Railways and even for the existing customers to know the various facilities available for them being provided by Railways.

According to a press release issued by Western Railway, with a view to provide ease of business to the customers and to garner additional volume of traffic and revenue to the railways, Freight Incentive Schemes are in existence for transportation of freight through Railways. Except for Station to Station Rates and Long term Tariff Contract, all the incentives/ benefits are provided at the Goods shed itself based on the traffic offered and the scheme guidelines.

Hence, in order to educate the freight customers about the initiatives by Railways, some of the major schemes available for transportation of goods through Railways are outlined below:

1. Station To Station Rates (STS):

This scheme was introduced in the year 2016 and is applicable to a specific stream of traffic of a particular commodity for movement between a specific pair of originating and destination stations/ points. Both incremental and New traffic gets a discount of maximum 30% and Container traffic can get up to 15% after crossing Benchmark Net Tonne Kilometres (NTKM), which is the average NTKM of the corresponding period of previous 24 months.

The percentage discount is over the Normal Tariff Rate (NTR) and given on RR (Railway Receipt). The agreement should be for a maximum of three years and not less than one year and is admissible to block rake, two point/multi point and mini rakes. However, commodities with classification below Class 100, Coal and Coke, iron ore, Military traffic, POL and RMC are excluded under this scheme. To avail benefit under the scheme, the desirous customer will have to submit application to Divisional Railway Manager of the concerned Division with full details of traffic offered, pair of station between which traffic is offered along with details of previous year traffic if any.

2. Liberalised Automatic Freight Rebate

Scheme on traffic booked in Traditional Empty Flow Direction (TEFD):

This scheme has been introduced in terms of the Rates Circular No. 08 of 2020 dated 22.4.20. Minimum traffic offered should be half rake of permitted stock. Rebate for certain commodities mentioned will be granted only after crossing the monthly benchmark. Discount in freight is offered from the first rake itself, except for certain specified commodities. The rebate is granted automatically on freight for notified streams of inter-zonal and intra-zonal traditional empty flow direction, subject to fulfilment of certain criteria. Freight shall be charged at Class LR1 for trainload and Class 100 for wagon load. Commodities such as all types of iron ore, coal and coke, Petroleum, Oil, Lubricants (POL), Railway Material Consignments (RMC), Military traffic and commodities under Class-LR2 and LR3 are restricted. Also, Short lead traffic of less than or equal to 200 kms are not eligible.

3. Long Term Tariff Contract (LTTC):

This scheme was introduced vide Rates Circular No.14 of 2017 dated 30.03.2017. Customers assuring long term traffic get assurance of certainty in tariff rates as well as freight rebate on fulfilment of certain conditions. A Customer already loading/giving traffic of atleast 1 Million Tonnes per annum in the previous year (outward or both outward and inward) are eligible. New customer (first time to Railways) is also eligible, if commitment is given of loading traffic of more than 3 Million Tonnes over the entire agreement period of three years with atleast 1 Million Tonne during the first year.

Customer availing rebate under STS, Freight Forwarder Scheme and short lead traffic as well as commodities with Class below 100, Coal and Coke, Iron Ore, Military traffic, POL, RMC, Container and Automobile traffic are not eligible. Net freight after rebate shall not be less than freight of Class-100. If both consignor and consignee are under LTTC, consignor will be given rebate. The agreement shall be for minimum 3 years and not more than 5 years. Rebate shall be granted as per the graded rebate structure given by Board either as refund immediately within 45 days after completion of each year or through freight adjustment in freight during the next year.

Graded discount on the entire traffic is granted based on the quantum of percentage increment over the accepted benchmark starting from more than 5% increment getting 1.5% rebate and more than 100% increment getting maximum 35% rebate. New Traffic shall be eligible for a flat 2.5% rebate on GFR. From second year rebates as per the rebate structure will be applicable. To enter into contract under this scheme, the desirous customer will have to submit application to Principal Chief Commercial Manager of the concerned Zonal Railway with full details of traffic to be offered along with details of previous year traffic if any. The customer can have agreement with single Zonal Railway or if desire can also have multi Zonal Railway agreement with application at single Zone also.

4. Freight Forwarder Scheme:

This scheme is covered under the Rates Master Circular for Freight Incentive Scheme dated 16-06-2015 inorder to facilitate cargo aggregation and expand the commodity basket of Railways. A Freight Forwarder is permitted to load one/two commodities in any number of wagons for which Train Load rate would be charged at applicable Class rate. A customer is also allowed to load more than two commodities upto 10 wagons for which a Composite Class rate of 120 would be charged. The scheme benefit will not be available for lead less than 700 Kms.

The restricted commodities include Coal & its variants, Coke & its variants, POL, RMC, Iron Ore, Traffic moved in privately owned wagons (including OYWS,WIS/ LWIS), traffic in ports, container traffic, Military traffic and Marine gypsum. For loading more than 2 commodities in a wagon, all types of ores and minerals, cement, foodgrain, chemical manures, iron and steel will be restricted. Under this scheme, for traffic on notified traditional empty flow direction, indent of less than full rake size is also acceptable. For covered and flat wagons minimum 20 wagons and for BOX wagons, indent of 30 wagons can be accepted.

5. Relaxation for loading of Steel pipes through Railways:

The Rates Master Circular for Permissible carrying capacity -2020 issued on 01.05.20 stipulates relaxation for loading of Steel pipe of diameter more than 16 inch, the charging which will be for 50 Tonnes only or actual whichever is more and for diameter less than or equal to 16 inch or mixed with both will be charged for 63 Tonnes (61 Tonnes for Excepted CC + 6 route) or actual weight whichever is more per wagon. This is permitted for loading in BOST wagons. Declaration regarding diameter of steel pipe has to be done by the customer in the forwarding note.

6. Relaxation for loading of Petcoke through Railways:

The Rates Master Circular for Permissible carrying capacity – 2020 issued on 01.05.20 & corrigendum 2 to RMC issued on 25.06.20 deals with the charging of petcoke when loaded in these wagons will be for tonnage as mentioned under:

Wagons:

BOXN: 63 Tonnes

BOXNHL: 68 Tonnes (66 Tonnes for Excepted CC + 6 route)

BOXNHS : 63 Tonnes

This scheme is permitted for loading in BOXN, BOXNH & BOXNHS wagons.

7. Concession for non-refined Salt for human consumption through Railway:

This scheme is stipulated in Rates Circular No. 8 of 2006.

●     Concession in graded form for above 1000 kms with minimum freight as prescribed.

1001 – 1600-        10% Not less than 1000 Kms freight

1601 – 2300-        15% Not less than 10% concession freight of 1600 Kms

2301 – 3000-        20% Not less than 15% concession freight of 2300 Kms

3001 & above-     25% Not less than 20% concession freight of 3000 Kms

●     Concession shall be granted on production of a certificate issued by the office of the Salt Commissioner or his authorized agents about the nature and category of salt along with Forwarding Note by the consignor under priority ‘D’ or ‘C’ as the case maybe.

●     Concession will apply to both ordinary refined iodised salt and ordinary non-refined salt meant for iodisation.

●     Not applicable to various varieties of refined salt, branded refined salt, free flowing saltable salt, vaccum salt, etc

8. Freight Incentive Scheme for loading bagged consignment in open & flat wagons:

This scheme was introduced vide Rates Circular No.27 of 2016 dated 20.10.2016 to garner additional volume of traffic and revenue. It is applicable only to trainload traffic. 20% discount on Normal Tariff Rate (NTR) for commodities mentioned in the circular and 30% discount on Urea. Minimum chargeable freight should not be less than NTR of Class – LR1. Commodities to be loaded in standard bags of size upto a maximum of 2.5 tonnes only in Open wagons. For Flat wagons commodities to be loaded in standard bags of upto a maximum of 100 kgs. Not applicable to traffic for less than or equal to 100km.Customer to give undertaking on F/Note giving consent for loading in Open and Flat wagons, and that they will bear the full risk of damage/pilferage of consignment.

9. Freight Incentive Scheme For Loading of Fly Ash:

This scheme was Introduced vide Rates Circular No. 09 of 2020 dated 08.05.2020 inorder to generate additional loading of Fly Ash and to ensure improved utilization of rolling stock, which came into effect from 10.05.20. This scheme is applicable only on train load. 40% concession on Normal Tariff Rate of applicable class for fly ash loaded in Open & Flat wagons. Customer has to give undertaking on F/Note giving consent for loading in Open and Flat wagons, and that they will bear the full risk of damage/pilferage of consignment. Fly ash loaded in covered wagons will be charged at Class LR1.

●     Concurrent Concessions:

a)     Freight concession granted to North East region shall be concurrently available.

b)    When transported in TEFD stream, the lower of the two NTRs shall be charges.

c)     For LTTC, the revenue actually paid to IR will be taken for calculation of AGFR.

10. Round Trip Traffic (RTT):

This is a newly introduced scheme vide Rates Circular No.11 of 2020 dated 05.06.2020 to provide advantage to Rail transportation over Road and which came  into effect from 01.07.2020. This scheme is also applicable only to block rakes. Customer commits to offer traffic in the return direction back to originating station from either the destination station or any point within 200kms of the destination station. No charging for rake movement from destination to point of return direction traffic within 200 Kms. Such traffic for outward and return will be charged at lower of the applicable class rates between the outward and return traffic.

If the outward and return traffic both have same applicable class of charging then flat concession of 10% will be provided for return traffic. The rate benefit will be given on the Railway Receipt of the return direction. Applicable, only if the loading in return direction begins within 24hrs of the release of the outward rake at destination. All Port terminals and sidings are covered under this scheme. Minimum chargeable after all concession not to be below Class 100.Freight rebate under assisted siding policy, wagon investment policy, and terminal development scheme can be given concurrently with RTT.

11. Short Lead Traffic:

This is another newly introduced scheme vide Rates Circular No. 16 of 2020 for granting slab wise concession in charging of freight. This is applicable for all traffic except “Coal & Coke, Iron Ore, Military Traffic, Rail Material Consignments (RMC) and Container Traffic” and for traffic booked upto 100 kms only. This scheme is Effective from 01.07.20 up to 30.06.2021.

Concession on Normal Tariff Rate (NTR) :

Distance:

●     0 to 50Kms –        50%

●     51 to 75Kms –      25%

●     76 to 90 Kms –     10%

12. Long Lead Traffic:

This scheme is also introduced recently vide Rates Circular No. 15 of 2020 and Effective from 01.07.20. This scheme entails granting slab wise concession to attract additional traffic in certain long leads by offering competitive freight pricing. Commodity wise, distance wise extent of concession are defined. This is also applicable for Train Load traffic only and will be effective up to 30.06.2021.

Concession on Normal Tariff Rate (NTR).

●     Coal & Coke –       Above 1400 Kms –                      20%

●     Iron & Steel –        Above 1600 Kms –                      20%.

●     Iron Ore –              Above 700 upto 1500 Kms –             15%

Above 1500 Kms –                      20%.

Western Rly has invited all interested parties to partner with Rlys and avail these customised offers and schemes. These schemes have been designed especially for freight transporters and W. Rly requests them to come forward and grab these attractive schemes. For further specific details of these schemes, the Rates Circulars as mentioned above can be accessed on the below mentioned link and Senior Divisional Commercial Managers (Sr. DCM) of various divisions over W. Rly can also be contacted for any assistance in this regard.