Indian Railways (IR) is witnessing a sluggish growth trend in container volumes, raising concerns over the performance of container train operators (CTOs) in the fourth quarter of FY25. According to a report by Nuvama, the container volume growth in FY25-to-date (April 2024 – February 2025) stood at 80.6 million tonnes (mnt), reflecting a modest 4.1% year-on-year (YoY) increase. However, the EXIM container volume growth is estimated at just 0-2% YoY, indicating continued weakness in the sector.
Challenges in Indian Railways Container Volume Growth
Despite India’s containerized EXIM cargo value increasing by 9% YoY between April-November 2024, a sharp 10% contraction in November 2024 suggests ongoing challenges. Global trade uncertainties and geopolitical tensions continue to affect EXIM demand, impacting rail freight movement significantly.
In February 2025, Indian Railways handled 7.11 million tonnes of container cargo (EXIM + domestic). While this figure remained stable on a YoY basis, it experienced a notable 12% month-on-month (MoM) decline. This sluggish performance raises concerns about the efficiency of railway transport compared to other logistics options.
Rail vs. Port Performance in FY25
During the first nine months of FY25, IR’s EXIM container volume grew by less than 3% YoY. In contrast, leading ports, including major private and listed ports, registered an impressive 9% YoY growth during the same period. This discrepancy suggests an increasing reliance on trans-shipment cargo and road transport instead of rail.
While Indian Railways reported a 3.1% YoY rise in container volumes for 9MFY25, total Indian port volumes grew at a much faster pace of 10% YoY. This difference raises concerns that IR may be losing market share to road transport. However, analysts suggest that increasing trans-shipment cargo and changes in cargo positioning closer to ports may be contributing to the trend rather than a fundamental shift in transport preferences.
Dedicated Freight Corridor (DFC) and Its Impact
The Dedicated Freight Corridor (DFC), which connects major ports like Mundra and Pipavav, has been operational for the past three years. However, it has yet to provide significant benefits to stakeholders, including container train operators, Indian Railways, and port authorities. The limited impact of the DFC raises questions about the efficiency of railway logistics and its ability to compete with road transport.
Performance of Key Container Train Operators
Key container train operators reported mixed performance during 9MFY25:
- Concor: Reported a 2% YoY increase in originating container volumes, indicating a slight recovery in market share.
- Gateway Distriparks: Faced a 5% YoY decline in container volumes, suggesting operational weaknesses.
- Adani Logistics: Achieved a 10% YoY growth, gaining market share despite the overall weak environment.
- Adani Ports’ Rail Volume: Declined by 6% YoY to 50,000 TEUs, marking its first drop in 18 months.
Future Outlook for Indian Railways Container Growth
The sluggish growth in container volumes highlights key challenges for Indian Railways and the logistics sector. To improve rail freight efficiency, Indian Railways may need to:
- Enhance infrastructure and capacity utilization of the Dedicated Freight Corridor.
- Develop strategies to attract more EXIM container traffic.
- Offer competitive pricing and incentives to encourage companies to opt for rail transport over roadways.
FAQs on Indian Railways Container Growth
1. Why is Indian Railways experiencing weak container volume growth? Indian Railways’ container volume growth is sluggish due to global trade uncertainties, geopolitical tensions, and the rising preference for trans-shipment cargo and road transport.
2. How did leading ports perform in comparison to Indian Railways? Major ports registered a robust 9% YoY growth in container volumes, whereas Indian Railways’ EXIM container volume grew by less than 3% YoY.
3. What is the role of the Dedicated Freight Corridor (DFC) in container transport? The DFC connects key ports like Mundra and Pipavav, aiming to improve rail freight efficiency. However, its benefits have been limited so far.
4. Which container train operators showed the best performance? Adani Logistics saw a 10% YoY growth in container volumes, while Concor managed a 2% YoY increase. In contrast, Gateway Distriparks reported a 5% decline, and Adani Ports’ rail volumes fell by 6%.
5. What steps can Indian Railways take to improve container transport? Indian Railways can focus on better infrastructure, strategic pricing, and policy reforms to attract more container traffic and enhance logistics efficiency.
Conclusion
The weak container growth trend in Indian Railways signals challenges in the sector amid global uncertainty. While ports continue to perform well, rail freight struggles to keep up. Future developments, especially in infrastructure and policy improvements, will determine whether Indian Railways can regain its competitive edge in container transport.
