Cement Prices Set to Drop as Railways Introduces Uniform Freight Charges
Railways’ new cement freight policy reduces costs, offers clarity for manufacturers, and supports affordable housing for middle-class Indians.
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The Union Ministry of Railways has declared a remarkable policy reform that seeks to lower the cost of cement transportation all over India. This step is believed to be a great advantage for the middle-class families who are in the process of building their homes.
In his address, the Railway Minister Ashwini Vaishnaw explained that the government has set a common freight rate of 90 paise per GTKM (Gross Tonne-Kilometre) for the transport of bulk cement. Vaishnaw, after presenting the Bulk Cement Terminal Policy and Container Rate Rationalization plan, pointed out that the initiative is aimed at the facilitation of logistics and the making of cement cheaper for the end-users.
"One of the primary costs for housing construction is cement. By fixing transportation prices, we are indirectly lowering the cost for families," said Vaishnaw.
GTKM is an industry-standard measure for freight calculation that indicates one gross tonne of material transported one kilometre. The new regime will mean that Rs 0.90 will be the cost of moving each tonne of cement over a kilometre, thus giving freight pricing transparency and predictability.
Vaishnaw pointed out that in the past ten years, the reforms introduced by Prime Minister Narendra Modi have made the railways more efficient, transparent, and cost-effective. He said that cement is still a major construction material and that lowering its transport cost is crucial for making housing more affordable.
The opening of a tank container specifically designed for bulk cement is an important part of the reform. The containers are directly filled at cement factories and can be shipped across the country, thereby saving the costs associated with handling and logistics.
"The tank container system will make the transport of cement easier and at the same time reduce the transportation costs significantly," Vaishnaw elucidated.
The new uniform rate announced by the minister comes as an end to the traditional slab-based system which he considered antiquated and erratic. Besides, with a fixed 90 paise per GTKM, cement producers are becoming able to plan the whole process from production, transportation to delivery effectively which is a win-win situation for both the industry and the final consumers.
Vaishnaw stated that the change will have a noticeable effect on the middle-class families, as the decrease in transportation costs will eventually lead to the decline of cement prices.
“The purpose of the initiative is to streamline the entire supply chain, give the customers clear pricing and help the goals of low-cost housing,” said Vaishnaw.
With this development, India’s freight infrastructure especially for construction materials is coming one major step closer to being digitized and at the same time, businesses and homebuyers will be able to reap the benefits of noticeable cost savings.
