EXCLUSIVE: Indian Railways may soon adopt a 'Pizza Delivery' model for freight supply

In a yet another Innovative Model, Railways is mulling the idea to adopt the 'Pizza Delivery' sort model in the Freight segment

According to sources, Indian Railways will provide a time-bound delivery of the material/commodity and if there is a delay, Railway will pay compensation.

Sources added that Union Minister of Railways Piyush Goyal has asked his team to take the idea forward as this Freight Delivery, a time-bound assurance, will not only help shift the players towards the national transporter but will, in turn, help boost the Freight revenues as well.

Indian Railways will provide a fixed time-frame for the delivery of commodities, sources said, failing which the Railways may give compensation based on every hour or every four-hour method.

Initially, the Railway plans to implement the Model on the limited sector and gradually take it forward, as the Dedicated Freight Corridor (DFC) completes by 2021.

For instance, any freight that is to be delivered between Mumbai and Delhi is supposed to take a maximum of three days or 72 hours. If not delivered in 72 hours, Indian Railways will pay compensation for every late hour.

Benefits:

Companies ranging from steel, coal, iron ore, and cement can always turn back to railways as the preferred mode of transportation

Railway eyes to target and attract new avenues like E-commerce, the auto sector, and the pharma sector as well with the new model.

Confidence behind Indian Railways innovative model

In the last one month, the Indian Railways has been able to double the average speed of Freight trains to 46kmph from 23kmph last year.

Railways has been able to massively take forward the infra-development, which includes doubling and tripling or rail line, electrification as well.

Targets

Railways has set an ambitious target for itself for the next four years to take the revenues and freight loading to new heights.

Railways has planned to increase cargo handling by 33% by 2024

Railway has set a target of increasing the cargo loading from 1200 million tonnes (MTs) in 2020 to 1600 MTs in 2024.

'Pizza Delivery': Railways' new formula to increase freight earnings

Railways may in the near future adopt a model like Dominoes' does for pizza delivery. Like pizza delivery, in railways also, the delivery of goods will be in the stipulated time or the customer will get the company refund.

According to sources- the formula is such that freight will have to be done within a pre-determined time frame and the customer will have to be paid back financial compensation every hour or every 4 hours if the insurance fails.

The biggest advantage of this railway model will be cement, steel, iron and, coal supplying companies that can once again turn to the railways.

Not only that, through this new model, the railways also want to draw new customers, ranging from e-commerce to auto, and the pharma sector.