India takes first steps on common rail route

Rail transportation of passenger cars in India is set to get a much-needed fillip with the Research Designs and Standards Organisation (RDSO) at Lucknow completing mandatory oscillation trials of its prototype wagons at high speeds last December. Specially designed by RDSO for the Ministry of Railways over the last two years, these wagons can be fitted in a rake with 27 wagons for transporting 318 passenger cars in different permutations and combinations. The three prototype wagons have a top speed of 100/95kph in India in both empty and loaded conditions, compared to the existing rakes which have a top speed of 65kph. Wagons continue to be twin decked but are now movable and not fixed as in the earlier versions.

Fixed decks restricted transportation to very small cars like the Maruti Alto or the A-star but now Maruti Suzuki’s tall boy Wagon R and even larger passenger cars can be accommodated by adjusting the middle deck, according to the specifications of the vehicle. Even popular SUVs can be moved by the rail wagons but they will limit the volumes carried by the rake. The new design is based on OEM feedback to eliminate earlier issues with the wagon design. Maruti Suzuki India, the country’s largest carmaker, which will be increasing its shipments going forward with new plants coming up at Manesar and in Gujarat , has taken special interest in this project by funding the development of the three wagon prototypes.

For Maruti, rail transport constitutes less than 5 percent of its total domestic sales with the balance handled by road transport. In comparison, Hyundai moves less than one percent of its sales by rail in India – around 3,600 cars per annum – and that too only for the North East (Guwahati), where there is a saving in terms of transit time of about nine days, according to R Sethuraman, director (finance and corporate affairs).

Freight forward

Meanwhile, the project idea for developing the wagon prototypes had germinated at a meeting between SIAM, Maruti, RDSO and other railway officials with the RDSO design reaching fruition by April 2011. Maruti’s involvement in the prototype construction as part of a public-private initiative helped shorten the lead time for the development of the wagon prototypes from the usual 3-4 years.

The Indian automotive industry has, for long, been bemoaning the lack of adequate infrastructure for transporting vehicles, with almost 95 percent relying on expensive road transport. On his recent visit to India, Stephen J Harley, executive director of global material planning and logistics, Ford Motor Company, said that Ford India is struggling a bit in terms of logistics. In most of its other locations globally, the American carmaker has a direct rail link to its manufacturing facility. He expressed his keenness to get a similar infrastructure in place facilitated by the Indian government, especially with diesel prices set to spiral road logistics costs after their deregulation. “We are in advanced discussions with rail equipment providers for improving the density of cars per carriage so that we can make an affordable solution for rail in the Indian network. In North America, 70 percent of our bulk volume of cars is moved by rail. If they are small cars, we load them on three decks because the rail guy is capable of taking tall wagons and since they are long drives, we can get a high-volume shipment from the factory to various hubs around North America.”

Harley had also expressed the need for an initiative to create a water corridor and then link it to rail and ultimately to road to circumvent long distances and congestion. Rail movement is particularly advantageous where vehicles involve movement over 500-1,750km of terrain where road logistics is expensive.

Ongoing movement

RDSO seems to have addressed some of these issues in its new prototype wagons manufactured by a Kolkata-based company in end-2012. Sources in the Railway Ministry told Autocar Professional that automobile companies currently face a herculean task, moving a volume of 2,000-4,000 cars per day by harnessing around 200-400 road trailers. Restrictions on the movement of road trailers on some highways and roads at certain times of the day further worsens the situation. This is where rail logistics for the auto industry is set to play a critical role.

Road trailers are usually 53 feet long and can carry only 10 cars at a time. Speed of evacuation is another grey area due to traffic congestion on most roads in India. With passenger car sales pegged to grow to 10 million in India by 2020, the potential for rail transportation is huge. At present, India accounts for 13 cars per 1,000 people while in the US, the ratio is 1,200 cars for every 1,000 people. There is, therefore, an immediate need for 60 trains to make rail logistics viable for OEMs while barely 8-10 of the older versions are currently in use. Moreover, rail sidings have to be located directly within the manufacturer’s facility to facilitate loading and unloading operations. This will also reduce the first-mile and last-mile connectivity costs.

“The high-speed potential of the wagons will help the Indian Railways in running them on tracks without disturbing the normal passenger trains, as the differential between the speeds between the passenger trains and this wagon is very less,” says the Railway Ministry source.

In terms of technical specifications, the current prototype wagons maintain the same height of 4305mm but the wagon length has been pushed up to 23 metres from the earlier 13 metres. Wagon breadth stands at 2900mm compared to the earlier 2100mm. This facilitates the driver in opening the car door to exit after parking the vehicle in the wagon due to the increased width. Earlier, this was not possible without encountering the wagon wall. Prior to 2008, passenger coaches were converted into rakes after removing the sleeper benches and transported around 125 cars in a single train. Thereafter, a lower and upper deck structure was built on the existing wagons to accommodate 265 cars in a single rake of 45 wagons.

Interestingly, RDSO has developed two types of wagons. The first design involves raising the floor height at one end for six wagons in a rake to facilitate their coupling at the permitted height with the remaining 21 wagons. An innovative technique enables the floor of these 21 wagons to be depressed. “A large number of logistics providers are asking us for the actionable design, especially for the Delhi-Chennai and Delhi Bangalore routes,” add sources. Recently, the Indian Railways notified a new Automobile Freight Train Operator (AFTO) scheme, under which logistics service providers and road transporters can leverage special wagons on the rail network and in return avail of freight rebates. With the AFTO policy under its belt, the Railways is now targeting a 25 percent share of car transportation in the near future.

The policy specifies that a rebate for carrying automobiles will be built into the freight rates offered by the Railways. An earlier AFTO scheme, launched in July 2010, had allowed private parties to operate special wagons on the rail road network with a 15 percent rebate on freight rates for every rake loaded. For every increase in throughput of 10 per cent, an additional two percent rebate on freight rates was provided for high-capacity wagons. However, the policy did not take off.

Sources say that after the revision of the AFTO policy, an AFTO licensee – whether a vehicle manufacturer or a logistics provider – as mandated by the policy will be eligible to buy the wagon design from RDSO and get it manufactured privately for its individual use. Sugato Sen, deputy director general of SIAM, says SIAM is holding internal meetings on the issue of freight tariff as even the base rates are very high, almost 150-160 percent of road fares, which are not justified. “The freight rates have been declared for the first time in the AFTO policy. The earlier policy offered discounts which have now been done away with,” he adds. Sen is of the view that rail logistics have increased over the years, accounting for almost six percent of the total logistics network with the major users being Tata Motors, Mahindra & Mahindra, Maruti Suzuki, Hero MotoCorp, Bajaj Auto, and TVS. Toyota Kirloskar Motor and Ford India are in the queue to leverage the rail network. Hence, SIAM plans to talk to the Railways Ministry after its internal deliberations are over.

Furthermore, in the recent Rail Budget, the rail minister Pawan Kumar Bansal had spoken about the increase in the price of high-speed diesel after deregulation of HSD oil and the need to neutralise its impact on the railways. In Budget 2012-13, an effort had been made to segregate the fuel component in tariffs and the minister proposed that this component be made dynamic in nature and change in either direction with the change in fuel cost, preferably twice a year. “It is proposed to implement the FAC-linked revision in only freight tariff from 1 April, 2013,” he said.

SIAM says it plans to take up this issue with the rail ministry. At present, rail transport in India holds a miniscule share of 4-6 percent of the total auto logistics market, which is pegged at Rs 1,800 crore, compared to 40 percent in the US. In the US, Honda is believed to be the largest user of the rail network at 82 percent to transport its cars.

The Indian auto industry is currently experiencing tough times. If the government and the Railways give rail logistics a helping hand, it will only help the industry get back onto the rails.