Freight Incentive scheme in Indian Railway

Freight Incentive scheme in Indian Railway

Western Railways’ Freight Incentive Schemes provide ease of business to the customers

Various railway incentive schemes for transportation of goods & parcels has been introduced by Western Railways. The Freight Incentive Schemes provide ease of business to the customers and also garner additional volume of traffic and revenue to the railways. Thus, these schemes based on the existing traffic pattern, results in win-win situation for the freight customers as well as for Railways.

Except for Station to Station Rates and Long-term Tariff Contract, all the incentives/ benefits are provided at the Goods shed itself based on the traffic offered and the scheme guidelines. Some of the major schemes available for transportation of goods through Railways are outlined below:

1. Station To Station Rates (STS)
2. Liberalised Automatic Freight Rebate Scheme on traffic booked in Traditional Empty Flow Direction (TEFD)
3. Long Term Tariff Contract (LTTC)
4. Freight Forwarder Scheme
5. Relaxation for loading of Steel pipes through Railways
6. Relaxation for loading of Petcoke through Railways
7. Concession for non-refined Salt for human consumption through Railway
8. Freight Incentive Scheme for loading bagged consignment in open & flat wagons
9. Freight Incentive Scheme for Loading of Fly Ash
10. Round Trip Traffic (RTT)
11. Short Lead Traffic
12. Long Lead Traffic

These schemes have been designed especially for freight transporters and Western Railway is requesting them to come forward and grab these attractive schemes. For further specific details of these schemes, the Rates Circulars as mentioned above can be accessed on the below mentioned link and Senior Divisional Commercial Managers (Sr. DCM) of various divisions over Western Railway can also be contacted for any assistance in this regard. indianrailways

Here’s a comprehensive overview of the Freight Incentive Schemes offered by Indian Railways, aimed at boosting cargo traffic, improving cost-efficiency, and promoting modal shift from road transport:

---

🚛 Key Freight Incentive Schemes

1. Traditional Empty Flow Direction (TEFD)

Automatically offers 15–20% freight rebate for traffic booked over 100 km in designated empty return corridors. Booking is done at normal tariff; rebate applied at billing. No application needed.

2. Long-Term Traffic Contract (LTTC)

Provides stable freight rates for one year, regardless of tariff hikes. Offers incremental rebates if customers exceed previous year’s Gross Freight Revenue (GFR), and retention discounts if volumes are maintained year-on-year. Requires agreement via zonal railways.

3. Station-to-Station (STS) Rates

Targeted at specific commodity streams between defined origin-destination stations. Offers up to 30% discount on new/incremental traffic and 15% retention discount. Container traffic can get up to 15% after benchmarks. Excludes commodities like coal, iron ore, POL, military traffic.
Requires direct application to Divisional Commercial Manager.

4. Round Trip Tariff (RTT)

Applicable when customers commit to return traffic within 200 km of the source. Both outward and backward traffic are charged at the lower applicable freight class. Generally capped at maximum discount of ~10% (coal/coke).
Requires application to respective zonal railway.

5. Short-Lead and Long-Lead Concessions

• Short Lead (0–50 km, up to 100 km): Discounts ranging from 50% to 10% on Normal Tariff Rate (NTR), except for coal, iron ore, container traffic.
• Long-Lead: Discounts (~15–20%) for select commodities (e.g., iron ore, steel, coal) moving over a specified distance threshold (>700 km or >1,400 km).

6. Mini Rake Scheme & Loading Incentives

• Mini‑rakes (≥20 wagons) can be booked under train-load class tariffs; supplementary charges may still apply depending on commodity/distance.
• Bagged Consignment Discount: Up to 30% rebate for moving commodities like cement, grains in open/flat wagons due to low availability of covered wagons.

7. Freight Forwarders Incentive

Encourages aggregators to combine multiple commodities in a single rake and offers train‑load class billing, making it feasible for smaller shippers.

8. Other Supporting Incentives

• No terminal charges (~₹20/tonne) when using alternative goods sheds nominated by railways.
• 25% discount on empty container or flat wagon movements, to promote return loading.
• Waiver of 5% supplementary charges on mini and two-point rakes.

---

🛠️ Private Wagon Operators (GPWIS & LSFTO)

General Purpose Wagons Investment Scheme (GPWIS)

Under this scheme, private entities procure GP wagons for up to 15-year circuits. They receive a 10% rebate on freight per RR for loaded runs, capped to lease charges paid by Indian Railways. Includes automatic rebate systems and exemption on empty run charges.

Liberalized Special Freight Train Operator (LSFTO)

Privately operated special-purpose wagons (e.g. auto-car carriers, chemical tankers) qualify for a 12% rebate on freight charges, valid for 20 years. Designed to service non-traditional or under-served commodity verticals.

---

📋 Quick Reference Table

Scheme	Rebate / Benefit	Eligibility / Notes
TEFD	15–20%	Auto-applied for routes with empty return flows
LTTC	Fixed rates + growth/retention rebates	1-year contract; applies to total GFR
STS (Station-to-Station)	▲30% / 15%	Requires zonal application; selective commodities
RTT	Charged at lower of two-way	Requires round-trip booking commitment
Short-Lead Discount	Up to 50%	For ≤100 km (excl. coal, iron ore, containers)
Long-Lead Discount	~15–20%	Commodity-specific with distance thresholds
Mini Rake + Bagged Loading	30% discount	Applied at booking via RR
Freight Forwarders	Train-load rate pricing	Aggregators book mixed consignments
Alternative Goods Shed Usage	₹20/tonne terminal waiver	When using nominated sheds
Empty Wagon Discount	25%	Towards ports or depots to return loaded traffic
Mini / Two-Point Rake Waiver	No 5% charge	Applicable per exemption policies
GPWIS (Private Wagons)	10% for 15 years	Private wagons in closed circuits
LSFTO (Special Wagons)	12% for 20 years	Operated by private freight companies

---

🔍 Why It Matters

• Multiple zonal and regional railways—including North East Frontier, Western, and others—actively promote these schemes as part of cargo expansion strategies.
• These concessions aim to make rail freight fare-competitive vs road transport—especially for perishable, agricultural, and containerized goods.

---

✅ For Potential Freight Customers

1. Check eligibility with your commodity and station pairs.
2. Apply via zonal railway (e.g. STS, LTTC, RTT) if required.
3. Ensure your routes qualify for TEFD; internal FOIS system applies rebates automatically.
4. Explore private wagon options like GPWIS or LSFTO if you operate large volume or specialized cargo.
5. Track other services like Mini-rake, Kisan Rail, Vyapar Mala Express for logistics flexibility.

---

Would you like help checking which scheme fits your specific commodity/station pair? Or need contact details for zonal Commercial Managers to initiate agreements?