Freight users encountered minimal network congestion during Q4 2023

Mumbai, 30^th, April 2024 - Dun & Bradstreet, a global leader in business decisioning data and analytics, in collaboration with Jupiter Wagons, released the Indian Railway Freight Activity (IRFA) Index, an initiative launched amid the government's efforts to enhance railway freight modal share. The report provides a comprehensive assessment of the dynamics of Indian Railway freight activity through the lens of the railway freight users.

At a quarterly frequency, the IRFA index comprises of two sub-indices - the Freight Activity Experience sub-index for the current quarter and the Freight Activity Optimism sub-index for the upcoming quarter, derived from a survey of railway freight users transporting freight through the five major railway zones i.e. Eastern, Western, Northern, Southern and Central. The index value ranges from 0-100, where 50 is the neutral level of railway freight activity on a year-on-year basis.

Key Findings:

• The Indian Railway Freight Activity (IRFA) Index stood at 63 for Q4 2023, where an index value above 50, indicates an increase in the level of activity on a year-on-year basis and vice-versa.
• The Freight Activity Optimism (sub-index) for Q1 2024 was higher at 67 compared to 59 for Q4 2023.
• The IRFA index is the highest for the Northern railway zone and amongst the mid-sized railway freight transporters.
• Sector-wise, IRFA index was the highest for the metals & mining and electric & electronics sectors, indicating both strong freight activity in Q4 2023 and high optimism for freight activity in Q1 2024.
• The gap between IRFA optimism level for Q1 2024 and IRFA experience level for Q4 2023 is the highest for the Central and the Eastern railway zones and lowest for the Northern railway zones. This suggests that the Central and Eastern railway zones are expected to experience a higher pace of freight activity in Q1 2024 over Q4 2023 compared to other railway zones.
• Availability and turnaround time for machinery for cargo handling and wagons improved the most in Q4 2023 compared to Q3 2024.
• Freight users have experienced an increase in freight cost in Q4 2023 over the previous quarter and expects it to increase in Q1 2024.

Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “Our survey uncovered two compelling insights. Firstly, railway freight transporters are encountering minimal network congestion, with only an average of 13% respondents identifying it as a challenge for two consecutive quarters. This aligns with the government's ongoing initiatives to alleviate congestion in railway routes and promote the shift of freight transportation from roads to railways. In February 2024, the government approved six multi-tracking projects spanning six states, anticipated to enhance wagon turnaround time, decrease logistics costs, and yield other indirect benefits such as reduced CO2 emissions. Secondly, our survey underscores a growing consciousness among businesses, particularly large and mid-sized enterprises, regarding sustainability in freight transportation. Notably, over one-third of these businesses are opting for railways to promote environmental sustainability”.