Railways Parcel Policy: Railways reworking parcel policy, eyes e-commerce revenues

The policy, which dictates the ferrying of small goods, such as home appliances on the parcel service of the Indian Railways, is being changed to allow movement of cell phones and sanitisers as parcels on the railway network.

These officials told ET that some objects of daily use such as alcohol-based sanitisers and other toiletries are not covered under the existing regulations of the railways.

It is now being planned to include these objects also in regulations by specifying stringent packing and other safety conditions. The current restriction extends to gadgets such as cell phones too and these norms are being relaxed soon.

Officials in the know said instances of deliberate mislabelling products and using the railway network for transporting them as parcels by smaller e-commerce players are being suspected. Larger e-commerce players on the other hand have been pushing for policy changes to make better use of the railway network.

To enable the

these goods, the railways has examined the guidelines being followed by airlines, and has decided to formulate and adopt similar ones.

These steps are in line with the Indian Railways’ plan to diversify its sources of revenue. The immediate impact will not be too significant for the Indian Railways since bulk freight movement of goods such as coal, cement and steel account for most of its earnings. It is expected that in the long run, these steps are going to help the railways in capturing additional non-conventional and non-bulk traffic.

But it will surely boost the prospects for e-commerce players. It is estimated that roughly 8-10% of all goods sold by Amazon in India already move through the Indian Railway network.

Parcel problems

The lack of scheduled parcel trains is considered as a hurdle for attracting players interested in time-bound movement of their goods. A pilot project for door-to-door delivery using the Indian Railway network was launched in March this year.

Officials said that the popularity of this service is gradually increasing, and is likely to further increase as more routes are added. For now, the absence of assured volumes is preventing the scheduled plying of parcel special trains, leading to delayed delivery times. It is estimated that the railway needs roughly 450 tonnes of goods to be booked before running a dedicated parcel special train.

According to railway ministry officials, most goods that are booked as parcels are ferried in parcel vans attached to passenger trains. At times, the trains are running at full capacity and the parcel van cannot be attached to its.

This makes it difficult to schedule movement of white goods that require a time-bound delivery.