By Rayan Amir – The Logistic News | March 5, 2025
Indian Railways is facing mounting concerns as its container cargo growth slows down ahead of the fourth quarter of FY25. With a modest 4.1% year-on-year increase, handling 80.6 million tonnes (mnt) of containerized cargo between April 2024 and February 2025, logistics stakeholders are closely monitoring the impact on supply chain efficiency and competitiveness.
EXIM Container Volumes Fail to Gain Momentum
A particular area of concern is the stagnation in export-import (EXIM) container volumes, which recorded minimal growth of 0-2% year-on-year. This slowdown is surprising, considering that India’s overall imports and exports rose by 9% in value during the first three quarters of FY25. A sharp 10% decline in EXIM volumes in November 2024 has further heightened worries about the sector’s resilience.
February 2025 Performance Signals Challenges Ahead
In February 2025, Indian Railways handled 7.11 mnt of container cargo (including both EXIM and domestic volumes), marking a flat performance compared to the previous year but showing a significant 12% drop from the previous month. This decline has sparked concerns among container train operators (CTOs), who are bracing for a potentially difficult final quarter.
Rail Growth Lags Behind Ports
A major challenge for Indian Railways is its lagging growth compared to ports. While the national rail operator recorded less than 3% year-on-year EXIM volume growth over nine months, India’s leading ports—both private and public—reported a much stronger 9% increase. This widening gap suggests that a larger share of EXIM cargo is shifting toward transshipment and direct port handling, reducing reliance on rail transport.
Additionally, the changing nature of cargo origination, with more goods being transported closer to ports, is contributing to lower demand for inland rail freight services.
What This Means for CTOs and the Logistics Sector
As Indian Railways struggles to keep pace with the broader logistics sector, container train operators must reassess their strategies to remain competitive. Industry experts suggest that improving multimodal connectivity, optimizing pricing structures, and enhancing service reliability will be key factors in maintaining relevance amidst shifting market dynamics.
With the fourth quarter of FY25 underway, all eyes are on Indian Railways to see if it can rebound or if the slowdown will further impact the industry’s logistics framework.
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