The Ministry of Railways has raised the freight rates for the transportation of automobiles on most of its modern automobile-carrier wagons, Business Standard has learnt. This is in contrast to the government’s efforts to become India’s preferred automobile carrier.

These rates have become effective starting Friday and will remain valid till May 2024.

After keeping the rates unchanged for two years to attract more traffic, the railway board, according to a November 30 circular, decided to revise rates for vehicles transported on its regular and high-speed newly modified goods (NMG) wagons. In 2022, the national transporter had said the 2021 revision in freight rates was done to encourage short-distance automobile traffic.

The Railways typically charges separate freight for every 50 kms, and the rates have been raised in different scales depending on the distance the automobile units will be transported for.

For instance, freight rates for distances up to 100 kms have been raised by 26 per cent, and a wagonload of cars will now cost approximately Rs 9,700 in rail transportation for that distance. 

Similarly, the rates for transportation of automobiles between 150 and 600 kms have been raised by as much as 11 per cent. Transportation of vehicle units for distances between 651 and 1,200 kms will be roughly 8 per cent costlier and longer distances (upwards of 1,351 kms to around 2,000 kms) will cost automobile manufacturers roughly 4 per cent more now.

The rates, however, remain unchanged for BCACM wagons, which operate along with BCACBM wagons for double-decker transportation of four-wheelers.

While the exact data for four-wheelers is not available, the average distance of a single consignment of miscellaneous goods (the commodity head under which cars are transported) on the railways is 729 kms in this financial year.

The first rake of high-speed NMG wagons was rolled out by converting Integral Coach Factory passenger coaches into goods wagons by 2021, and can carry three-four four-wheelers in a single wagon, depending upon the size of the unit.

In 2021-22, the Railways held a 16 per cent share in the overall transportation of four-wheelers in the country, and has been aiming to become the leading transporter in this space. 

While last-mile issues and rake design concerns had plagued the industry earlier, the polluting nature of road transport is prompting many automakers to consider a shift to railways. Maruti Suzuki India has been the leading automaker in this supply chain shift.

In August, the country's largest carmaker had said it plans to double its rail transportation volumes over the coming three years, from the 335,000 units it had transported in 2022-23.

Queries sent to automobile manufacturers that use the rail network for vehicle transportation, such as Maruti Suzuki India, Tata Motors, Hyundai Motor India, and Mahindra & Mahindra, did not get an immediate response at the time of the publishing of this report.