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Railways announces the reintroduction of peak season surcharge after 3 years

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Indian Railways recent announcement may just put an end to the temporary respite of the hinterland importers and exporters, from the pressure of soaring carrier rate hikes. The Railways has announced the reintroduction of 15% peak season surcharge it typically applies from October through June to take advantage of seasonal volume surges. The surcharge was suspended back in 2019 to combat the sinking demand as a result of economic troughs, which were further deepened due to the effect of the pandemic.

“The matter has been reviewed and the competent authority has decided that from 1 October 2022, the busy season charge shall be leviable as it was in force prior to 1 October 2019,” a public notice said.

As a result of the efforts made by the government as well as the public transporter itself, Indian Railways has lately seen a promising improvement in the freight volumes. This has further allowed the Railways authority to adjust the pricing dynamically. With the decision to levy the peak season surcharge, the Indian Railways is expecting to rake in additional revenue of around USD 430 million, according to sources.

Indian Railways saw freight loads rise 15% year-over-year in the fiscal year 2021-22 which ended in March. And this upswing has continued into the current year, with August volumes reaching a new monthly high of 120 million tons.

The national transporter’s freight loading for the financial year ending on 31 March 2022 stood at 1418.1 MT (provisional), 15% more than the previous best set in FY 2020-21 at 1233.2 MT. Moving its wheels with a new mantra, ‘hungry for cargo’, the railways were able to bag the desired results on the back of transporting coal and cement. The national transporter for the first time breached the 1400 million tons (MT) goods loading mark in the financial year (FY) 2021-22.

Also Read: Gati Shakti Cargo Terminals to boost Railways’ revenue and generate employment

Buoyed by positive demand signs, the Railways recently cut back on the haulage incentives it had earlier implemented for the movement of laden and empty containers in line with the government’s export growth approach. The scale of tariff concessions for empties, which had been revised downwards from 25% to 15% in April this year, is now at 10% until the end of October.

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