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Lockdown woes: Rail freight traffic drops 28% in April-May

By Shine Jacob & Shreya Jai
June 08, 2020 16:24 IST
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Freight earnings too saw a decline of Rs 8,284 crore to Rs 13,412 crore in the first two months of FY21, compared to Rs 21,696 crore during the same period last year.

Owing to the decline in economic activity during the first two months of the fiscal year 2020-21 (FY21), rail freight traffic in April and May dropped by 28 per cent, or 58 million tonne (mt), to 148 MT, compared to 206 mt during the same period last year.

Among the commodities, coal was the worst-hit, with the sector contributing 60 per cent to the total decline.

 

Out of the total decline of 58 mt, coal freight traffic alone saw a decline of 35 MT.

In April-May, coal loading was seen at 71 mt, compared to 106 mt during the first two months of FY20.

Freight earnings too saw a decline of Rs 8,284 crore to Rs 13,412 crore in the first two months of FY21, compared to Rs 21,696 crore during the same period last year.

The earnings from the coal sector saw a decline of Rs 5,313 crore to Rs 5,720 crore, compared to Rs 11,033 crore in the corresponding period last fiscal year.

The decline in coal freight traffic is mainly because of a fall in power demand.

State-run Coal India (CIL) saw its sales falling by 23 per cent in May and 26 per cent in April as power utilities purchased less coal because of a fall in demand and higher stockpile.

At the same time, power generation in May dropped 14.3 per cent, and the overall power demand for FY21 is expected to drop for the first time in 36 years.

CIL said thermal units were flush with coal stocks sufficient for as long as 28 days.

“Many of the thermal plants have requested CIL to regulate coal supplies to them,” it said.

CIL has now decided to go slow on mining.

As demand has fallen, CIL has shifted its focus to remove the overburden, rather than mining.

All the subsidiaries have stalled mining operations.

Recently, CIL also offered to substitute thermal units’ imported coal supply with domestic coal.

Among other commodities, iron ore saw a drop of 7 MT in loading and led to a drop of Rs 763 crore in freight earnings during the period under review.

Other commodities that saw a fall in loading include cement by 6 MT, clinker by 3 MT and pig iron and finished steel by 3 MT.

The only commodity that saw an increase in movements was foodgrains.

During the period under review, foodgrains traffic saw an increase of 5 MT, and earnings from foodgrains rose by Rs 606 crore.

Photograph: Reuters

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Shine Jacob & Shreya Jai in New Delhi
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