Railway Freight Earnings Decline By 38 Percent In April-May

Indian Railways’ freight revenue declined in April and May, as the covid-led lockdown brought the economy to a standstill.

In April-May, earnings from movement of goods declined 38% year-on-year to ₹13,436 crore, as per railway ministry. Freight traffic volume was down 28% during the period under consideration to 149 million tonne (mt).

In May, freight earnings fell from ₹11,043 a in the year-ago to ₹7,437 crore. In terms of volume, it fell 21% year-on-year to 82.6 mt.

However, movement of goods picked up substantially, compared to April, when freight traffic was 65 mt and revenue was ₹5,999 crore.

But earnings per million tonnes declined sequentially to ₹90 crore in May from ₹91.72 crore in April.

Revenue from freight is crucial for the national transporter as it has a direct impact on its operating ratio—or the amount spent on every rupee earned. Besides, volume of commodities transported by the railways is also an indicator of the health of the economy. The nationwide lockdown from 25 March led to cancellation of all train services for over a month, barring goods trains, but earnings took a hit due to the dip in coal and cement movement.

The railways transports a wide basket of goods, including foodgrain, fertilizers and industrial outputs, such as coal, cement and iron ore, among others. The cement and coal segments comprise more than 50% of freight movement for Indian Railways.

Earnings from coal declined to ₹5,778 crore in April-May from ₹11,033 crore in the same period last year. Earnings from cement fell to ₹730 crore from ₹1,630 crore a year-ago.

However, the movement of foodgrain witnessed a sharp jump, with revenue rising over 50% year-on-year to ₹1,177 crore. While the lockdown disrupted the movement of goods across most sectors, the railways continued facilitating transportation of essential goods, including foodgrain, across the country.