The Indian Railways (IR) have, over the past four decades, been steadily losing
market share, in both passenger and freight markets. In the case of freight, they have
gone from being the dominant mode to being carriers of bulk traffic only. Most of
the general goods, high value, traffic has shifted to road. In line with the pattern of
economic growth, the manufactured goods sector is the fastest growing sector of the
economy. This leads on one hand, to exclusion of JR from an important, and
growing, sector of the economy and on the other hand to heavy strains on the already
saturated road network, higher environmental dis-benefits and higher costs of
petroleum imports. The Container Corporation of India (CONCOR), a subsidiary of
IR, is now attempting to enter the domestic freight market, to recapture some of this
freight traffic.
The present work has been taken up, with the final objective of developing a
methodology, for identifying sectors where viable intermodal services can be offered,
in comparison to road, as well as rail, services and to determine the price and service
levels required for the same.
In the absence of any revealed preference (RP) data, as well as any previous work on
valuation of attributes for the different sectors, we have used an Adaptive Stated
Preference (SP) design for our work. The Leeds Adaptive Stated Preference (LASP)
software has been modified and used for the work. Various alternatives have also
been examined, with regard to the approach to be used for analysis of the survey data
and we have finally decided to use individual level models aggregated using weighted
averages as these appear to provide the most robust estimates.
We have developed models for costing of, door to door, freight movement by road,
rail and intermodal services. These models have been used in conjunction with the
demand model to assess the viability of the different services for the sectors
considered.
Our findings indicate that, using fully allocated door to door costs, rail is a clear leader
for distances over about 500 Km, on cost basis alone. However, when the service
quality factors are taken into account, intermodal services become more attractive for
the high value, damage prone, products while road services are more attractive for the
lower value products. Rail services break even under 1500 Km only in a few of the
situations considered by us and Intermodal service break even under 1500 Km for a
large number of the situations (in case of use of new high speed wagons this
breakeven shifts to between 500 to 1000 Km). Rail services would need to match the
quality of road services, or be priced on marginal cost basis, to be competitive, as
compared to road services. Intermodal services can be quite profitable, with
presently attained transit times using the older (BFK) wagons, if they are offered at
least thrice a week. The larger firms also appear to be more likely to go for
intermodal services, than smaller firms. In case of the newer, high speed wagons, the
increased capital costs are offset by the gains due to faster turn-around and there is a
substantial improvement in the quality of service (time & reliability) that can be
provided. This provides an opportunity for a highly profitable service to be provided
with the induction of the new wagons.