The government owned and operated Indian Railways has hiked freight rates by 7-15 percent and imposed an additional charge of INR 55/mt ($0.83/mt) for loading and unloading, an official statement from Indian Railways said on Wednesday, August 24.
Indian Railways said that the higher freight rates will be effective on commodities transported between distances of 200-700 km. However, as regards commodities transported for distances above 700 km, the freight rates have been reduced by 3-14 percent, the statement said.
Explaining the impact of the revision of freight rates, an Indian Railways official said that, under the new tariffs, freight rates for commodities transported up to 500 km will be an estimated INR 712/mt ($10.78/mt) against INR 702/mt ($10.63/mt) earlier. For distances up to 1,800 km, the effective freight rate will be an estimated INR 2,138/mt ($32.39/mt) as against INR 2,343/mt ($35.20/mt) earlier.
Steel mills are still in the process of calculating the impact of higher freight costs for transporting imported coking coal and thermal coal for captive power plants as this will vary depending on the respective distances of steel mills from the nearest coal pitheads, an official at a large private sector steel mill said.
However, giving a thumb rule estimate, the official said that on an average costs would go up by an estimated INR 100 ($1.50) for steel plants using imported coking coal and domestic thermal coal for captive power plants and this excludes higher costs of transporting finished products.
$1 = INR 66.26