Indian Railways spurs its parcel business; plans schemes to attract Flipkart & Amazon

To encourage online retailers to use Indian Railways for transporting parcels, special schemes have been devised by Indian Railways which will also uplift its parcel business.
Indian Railways spurs its parcel business; plans schemes to attract Flipkart & Amazon
To encourage online retailers to use Indian Railways for transporting parcels, special schemes have been devised by Indian Railways which will also uplift its parcel business.
 
With special plans and schemes to attract online retailers that use road transport to transfer heavy volumes, the railways parcel business is all set for an e-commerce push. Currently, Indian Railways earns around Rs. 2,100 crores from its parcel business which is expected to go up to Rs. 5, 000 crores in 3 years if it manages to tap immerging business.
 
This move can be a breather for Indian Railways as it is continuously battling it financial crisis every year. “We are working on a special scheme to tie up with emerging eCommerce companies for transportation of their parcels,” said a senior railway board official. “Initial deliberations have been held and suggestions will be sought from all major online retailers including Amazon and
 
Flipkart before a detailed plan is firmed up.” According to a Morgan Stanley projection, India’s eCommerce market will grow to $100 billion (about Rs 6 lakh crore) by 2020 from $3 billion (about Rs.18,000 crore) in 2013.
 
Shares of logistics companies such as Blue Dart and Gati have been among the best performers on stock markets in anticipation of this boom, in which the railways has a very small stake. “Railways get a minimal share of 5% for white goods as rest is transported through road. It could easily be expanded to 25% with eCommerce companies on board,” the official added.
 
A lot has been done in order to upgrade railway’s tracking system.  eCommerce buyers and suppliers are very keen on keeping a track on their parcels and time of delivery. Currently, the parcel tracking system has been operational only on the Delhi- Howrah route from the past three years. Railway also offers parcel van for all express and premium trains.
 
Under railway minister Suresh Prabhu, the national transporter is looking at innovative ways of expanding its revenue stream. The railways will also encourage private operators, logistics operators and aggregators for lease of such trains. “We must offer full logistics service to its users by engaging these service providers at each location,” the railway board official said.
 
 “We can offer a cost advantage of up to 50% over road to these companies, especially for distance up to 500 km,” said an official from the freight traffic department. As per experts, the move has the potential to make the supply chain in the country more efficient. “It will not only help the railways improve its traffic in various segments, including increasing its share in white goods, but also help eCommerce to diversify into bulky products, which can be economically transported over the railways,” said Jaijit Bhattacharya, partner, infrastructure and government services.
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