freight marketing by indian railways

8/8/2019 Freight Marketing by Indian Railways

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Freight Marketing by Indian Railways

Presented By :

Rajneesh Jain

Ritu Shukla

Smita Choudhary

Vinayalatha S.

S.Sagar

A.K.Mahtha


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Indian Railways A success story

Largest network in Asia and2nd largest in the world

Covers the length & Breadthof the country 63000 route

kms Everyday transports 1.8 m

people and handles 2.2mtons freight

Railways Turn around afavourite case study of B-schools across the world


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0

5000

10000

15000

20000

25000

R

C

o

2004-5 2005-6 2006-7 2007-8

Y

R u p u G n on


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Revenue share

Freight traffic

accounts for 65% of

total revenue

Passenger traffic

contributes 27% of

total revenue

Share of revenue on IR

Rs crores

Goods,

47743, 65%

Passenger,

20075, 27%

Misc, 5837,

8%


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Services offered by Railways

PassengerService

Mail/Express

Ordinary

Urban/Suburban

Local/ EMU, MEMU,

METRO

Passenger Earning Segmentation

Upper

Class, 3424,20%

2nd M/E,

9030, 53%

Ordinary,

3294, 19%

Suburban,

1427, 8%


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Services offered by Railways

Goods Service

Bulk Subsidized (Fertilizer,

food grains, coal, iron ore)

Other Bulk (POL, Cement,

Steel)

Piecemeal/Small -Value

added (Perishable,

Finished goods)

Other Bulk and High value

Freight services- Cash Cows

Passenger and Bulk subsidized Traffic are cross subsidized

by other Freight services


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Freight Segmentation

Freight Revenue segmentation

Coal, 15886,

39%

Foodgrain,fertilisers

etc, 5515,

13%

POL,Iron

Ore,Cement,

Steel,14587, 36%

Other, 4890,12%


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Traditional Approach -Production

Orientation Pricing :Objectives To Meet social obligations subsidies were resorted to

Single undifferentiated rate- w.r.t route, direction,volume, season

Ease of Administration No customer focus

Consequences

Overfull demand of subsidized segment

No surplus for capacity building Degeneration in quality of service

Non subsidized traffic diverted to Road/Air

Railways in Financial stress by late 1990s


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Emergence of New Thinking

Switch over to marketing orientation

Railways in Financial stress

Losing high value freight to Road

In 1951, Road carried 18% of freight Traffic andRailways 70%

Today, Road carries 65% and Railways carryonly 35%

High -end Passenger traffic being diverted toAirlines (LCC)

Opportunity with emergence of newbusiness partners (PPP)


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Segmenting, Targeting and positioning

Freight gives 2/3rd of revenueand uses only half theresources.

Freight Service is the key toviability of IR

Bulk Freight viz POL, Cement,Imported Iron Ore are mainprofit earners

Small and Piecemeal freightcan offer substantial business(Low Volume, high valueFreight)

Sunrise items like perishables-fruits, vegetable, fish, milk etcand finished goods likeFMCGs offer new dimension ofbusiness


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Who are Railways Prime Customers ?

POL to be lured back

Bulk Traffic from/to ports ( imported iron ore fromports to steel plants) emerging market

Small piecemeal Container traffic Perishable goods (fruits, vegetables, flowers fish)

High value FMCG products

Growing & Highly profitable


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Marketing Orientation-Customer is

the king What customers

demand ?

Low Tariff

Seamless and needtailored service

Reliable and timely

service

Information(traceability/tracking)

Door to Door Delivery

Courteous treatment

from service provider


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Marketing Oriented Approach

Capacity Building with partnership

Offering complete logistics for last mile servicethrough partnership

Competitive Pricing Strategy Powerful Information dissemination for traceability

Friendly Customer interface

Connecting with customer


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Capacity Building through

Partnership

PPP model

Dedicated Freight Corridor.- additional

tracks

Terminal Development Plan-more freightyards

Liberalised wagon Investment Scheme-

additional wagons owned by private co.

own your wagon scheme

Leased by freight forwarder or private bulk

transportes

Maintained and moved by railways


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Complete Logistic

Provisioning

Role of Freight ForwarderSource forpicemeal

Road

Privateyard1

Source2

Destinationfor piecemeal

Privateyard2

Source2

Railway Route Forrake movement

Road


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Logistic Provisioning

Door to door delivery and seamless

service

Appointment of freight forwarder

Running of express parcel train

freight trains run on a time table

Timely delivery

for perishables goods in refrigerated rakes for supply chain management


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Competitive Pricing strategy

Competitive tariffs for non subsidizedsegment rationalization and reduction of tariffs

for POL, ,imported iron ore, cement etc.

Utilization of empty rake movement forrevenue earning incentive scheme for traditional empty flow

direction( 30%discount)

incentive scheme for return booking (15%discount)

long term special incentive scheme (15%less)

Incentive scheme for incremental traffic

(volume discount) in lean season -20%


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Information For Traceability

Implementation of Freight OperatingInformation System (FOIS)

Rake Management system (for tracking

movement)

Terminal Management System (For Billing,

record keeping, claim processing etc)

Information Dissemination throughWeb

and call centre.


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We connect emotionally to the

We connect to people who feel

strongly about...

Speed and reliability of service

Power of Information Energy security

Rising Import Oil Bill of the country

Rising Pollution level


20/20

freight marketing by indian railways

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