The Railways play a paramount role in the transportation of goods across the country and is considered to be a crucial method of transportation especially for bulk cargo.
With the Vizag Port Authority and Ganagavaram port being huge handlers of bulk cargo the availability of rakes (each rake has about 58 wagons) is of supreme importance.
However, keeping in mind India’s surging power consumption coal has been in huge demand from power houses for the generation of electricity. The government of India therefore had given a mandate to give priority to transportation of coal to power generation companies.
This in turn has disrupted the supply chain of rakes as with the diversion of rakes to power houses other bulk cargo customers have had to face the brunt of the situation. One must note that coal is also used for making steel, cement and others and not just power generation.
‘It indeed is a very tough time. As per the directive from the government of India we have to give priority to power houses. Thus all rakes are being directed to places where the mines are located. Unfortunately in my division there are no coal mines so rake availability is currently a problem here’ said Mr Anup Kumar Satpathy speaking exclusively to Vizag Industrial Scan.
Unavailability of rakes has indeed become a cause of concern for trade as many of them have no choice but to wait thereby increasing their costs and delivery time.’Our waiting period for empty rakes has gone upto 10 days from the 2-4 days earlier. There is easily a 25% shortage of rakes just for us’ said an industry insider.
Mr Sathpathy however hoped for the situation to ease with the monsoon season being round the corner and thereby easing power demand leading to freeing of rakes.
Concurred Vizag Seaport Pvt Limited’s, CEO and wholetime director, Mr Ragam Kishore and said ‘This is a seasonal demand supply gap which always happens around this time of the year and will ease as and when monsoons kick in’.
Mr Kishore though advocated for the railways to ramp up their rolling stock inventories so that shortages like these can be avoided in the future.
‘It is due to the limitation of availability of rolling stocks with the railways that these situations arise and if necessary steps are taken to increase inventories rake shortages could become a thing of the past’ opined Mr Kishore who is also the chairman of CII, Visakhapatnam zone.
Waltair Division Freight Loading
Albeit Waltair division witnessed an overall increase in total freight traffic for the months of April and May 2022 compared to the corresponding period last year its freight earnings declined.
The division registered freight volumes of 11.30MT for April and May 2022 compared to 10.69 MT in the same period last year, an increase of 5.7%.
Railways need to augment their rolling stock capacities so situations like these can be avoided in the future.
Mr Ragam Kishore, CEO, VSPL, Chairman,CII, Vizag Zone
Freight earnings on the other hand saw a marginal dip of .7% as it registered Rs. 1294.75 crores in April and May 2022 compared to Rs. 1303.85 crores in the same period last year.
Mr Satpathy said that there has been a substantial drop in volumes of both iron ore and finished steel loading. ‘Loading of these two commodities are easily down 40-50%’ said the DRM. Citing higher iron ore prices to be the reason behind fall in volumes Mr Satpathy however hopes for a price correction soon in iron ore.
‘With an expected correction in NMDC’s prices for iron ore we forecast iron ore and steel loading to increase in the coming months’ said the Waltair division’s DRM.