Dun & Bradstreet, a global leader in business decisioning data and analytics, and Jupiter Wagons, released the Indian Railway Freight Activity (IRFA) Index. This index is an initiative launched amid the government’s efforts to enhance railway freight modal share. The report provides a comprehensive assessment of the dynamics of Indian Railway freight activity through the lens of the railway freight users.
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Released at quarterly frequency, the IRFA index comprises of two sub-indices – the Freight Activity Experience sub-index for the current quarter and the Freight Activity Optimism sub-index for the upcoming quarter, derived from a survey of railway freight users transporting freight across the five major railway zones i.e. Eastern, Western, Northern, Southern and Central. The index value ranges from 0-100, where values greater than 50 indicate increase in the railway freight activity compared to the same period last year and values less than 50 indicate a decline.
Key Findings:
- The IRFA index, rose by 3.3% in Q2, as firms grew more optimistic about freight activity in Q3.
- Firms expressed greater optimism for freight activity in Q3, particularly for export-import trade (EXIM), with overall confidence increasing by 7.7% as compared to Q2 2024.
- Medium and small firms showed increased confidence in EXIM freight for Q3, while large firms’ optimism sharply declined by 53% from Q2 to Q3.
- The western region is most optimistic about domestic freight and EXIM freight. The eastern region remains the least optimistic for both in Q3.
- Optimism for the demand for containers is highest in Q3 2024, especially among large firms. Demand expectations for wagons also improved the most from Q2, indicating a rise in resource requirements.
- Despite a positive outlook for Q3, there is widespread expectation of rising freight costs due to ongoing challenges like resource availability and transit delays.
Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “Our survey highlights that escalating geopolitical risks, including the Israel-Hamas conflict, high container freight rates, and congestion in key eastern routes, have dampened optimism among large firms for Q3 EXIM freight activity, with confidence declining in Q3 from Q2. Medium and small firms, being less exposed to global supply chain disruptions, showed increased confidence. While firms broadly anticipate rising freight costs due to challenges such as geopolitical conflicts, resource availability, and transit delays, the overall outlook for Q3 freight activity remains positive, especially in export-import movements, though optimism varies by firm size.”
Mr. Sudip Haldar, Chief Technical Officer, Jupiter Wagons, commented, “The survey revealed higher optimism for EXIM freight in Q3 compared to domestic trade across regions, with the western region leading in optimism for both domestic and EXIM activity, while the eastern region was the least optimistic in both areas. Firms indicated increase in demand for wagons, containers, and rakes in Q3 from Q2 2024, despite facing challenges around the availability of wagons, rakes, routes and labor in Q2. Regional variations also emerged in rail transport utilisation: in the eastern region, less than half of firms use rail for bulk transport, while only 29% in the central region prioritise rail for delivery speed, and around 50% of firms using the northern and southern railways rely on it for reliability.”
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Source – Prnewswire
