The Railways must treat container train operators as partners rather than competitors to facilitate more private investments in the sector
Nearly two decades after the central government unveiled a policy allowing private operators to run container trains on the Railway network, the sector is still grappling with a plethora of challenges while its growth remains largely sluggish. Regulatory hurdles, infrastructure limitations, high costs, stifling rules set by the Railways and unreliable service on railway networks are among the stumbling blocks that are preventing container train operators (CTOs) from realising their full potential. The latest data indicates a sluggish growth trend in container volumes. In February 2025, Indian Railways handled 7.11 million tonnes of container cargo (EXIM and domestic combined), which remained flat year-on-year but fell 12% month-on-month. Lack of policy stability and unpredictable pricing mechanisms have created a suffocating environment for CTOs which are already burdened by high capital investments and operational costs. The Railways need to ease the restrictions and controls, create a more stable policy framework, rationalise haulage and other charges and treat the CTOs as partners rather than competitors to facilitate more private investments in the sector. The inordinate delays in the maintenance of rakes, lack of guarantee on timelines and inflexible approach in dealing with market conditions are adding to the woes of the industry. Establishing terminals with rail connectivity for loading and unloading goods and acquiring land for these terminals pose significant challenges for CTOs. A majority of domestic container terminals have small-scale operations, which makes the terminal services expensive for the consignors.
Lack of assured transit time has been hampering container movement, particularly in the tier-two sectors. Moreover, the Railways does not guarantee a timely supply of locomotive power, resulting in delays in container trains’ movement. The absence of basic terminal infrastructure, poor maintenance of good sheds and warehouses, and unavailability of wagons as the rolling stock are the other hindering factors. This results in high congestion, lower service levels and delays in transit time. CTOs, other than the state-run Container Corporation of India (CONCOR), struggle to attract traffic in the absence of assurance of timely delivery of goods. There is a need to put in place a transparent, fair and predictable haulage charge regime so that the industry does not have to face sudden shocks and loss of business. For long, CTOs have been requesting the government for a rationalisation in the haulage structure to attract more light cargo, and in general address the issue of price competition with the road transport sector more effectively. The year 2006 was a landmark for the industry when the Ministry of Railways introduced a policy to issue licences to private operators for the transportation of containerised cargo. Licences were issued to 17 companies and there was a burst of activity. However, it stagnated later. Over the years, private operators started feeling sceptical about the viability of their business.
