Cement may shift to rail from road

Cement may shift to rail from road
Published: 01 January 2007

The Indian Railway system was likely to emerge as the optimum logistics option for the Indian cement industry, a report released recently indicated. As of now, road transport has a substantial share in cement transportation.

However, going forward, a gradual shift from road to railways is likely to take place, according to the report released by CARE Research, the research and information services arm of Credit Analysis & Research Ltd (CARE).

Freight costs depends upon the type of transportation used, like road or rail or marine. About 60 per cent of cement gets transported by road at present, and only 30-35 per cent was transported by rail.

According to CARE, going forward, a gradual shift from road to railways was expected to take place owing to several reasons.For one, the prohibitive increase in the price of diesel used by trucks had greatly widened the gap between the cost of transportation by road and the cost of rail transport.

Thanks to PMS, SR had witnessed an increase in cement traffic from 1.89Mt in financial year (FY) 2005 to 2.72.Mt in FY 2006.

India Cement shipped 28 per cent by rail and 68 per cent by road, with 3 per cent going by sea. GACL shipped 16 per cent by rail, 61 per cent by road and 21 per cent by sea. Ultra Tech sent 38 per cent by rail 44 per cent by road and 16 per cent by sea. Madras Cement sent 79 per cent by road, 16 per cent by rail and 5 per cent by sea.