Railway Incentive Schemes for Transportation of Goods and Parcels
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:
- Station To Station Rates (STS)
- Liberalised Automatic Freight Rebate Scheme on traffic booked in Traditional Empty Flow Direction (TEFD)
- Long Term Tariff Contract (LTTC)
- Freight Forwarder Scheme
- Relaxation for loading of Steel pipes through Railways
- Relaxation for loading of Petcoke through Railways
- Concession for non-refined Salt for human consumption through Railway
- Freight Incentive Scheme for loading bagged consignment in open & flat wagons
- Freight Incentive Scheme for Loading of Fly Ash
- Round Trip Traffic (RTT)
- Short Lead Traffic
- 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.
Here’s a detailed overview of Indian Railways’ incentive schemes for goods and parcel transport, designed to attract customers, reduce logistics costs, and promote sustainable cargo movement:
Contents
🚚 Freight Incentive Schemes
1. Traditional Empty Flow Direction (TEFD)
- Automatically offers 15–20% discounts on Normal Tariff Rate (NTR) when cargo is booked in routes traditionally carrying empty wagons in return direction. Discount applies from the first Railway Receipt (RR) itself; no application needed
2. Long-Term Traffic Contract (LTTC)
- Freight tariffs are fixed for 1–3 years, shielding customers from tariff hikes. Offers rebates for growth beyond previous year’s Gross Freight Revenue, and retention rebates if volume is maintained
3. Station-to-Station Scheme (STS)
- Up to 30% discount for new/incremental commodity flows between specified station pairs (up to 15% for retention traffic). Requires application to DRM/Central Freight Manager; valid for block, mini, or multi-point rakes
4. Round Trip Tariff (RTT)
- If return cargo is booked within 200 km of destination, both outward and return freight are charged at the lower of the two rates. Live from late 2025 onward; cap of 10% discount for coal/coke
5. Long-Lead & Short-Lead Concessions
- Long-lead (e.g. coal, iron ore, iron & steel): 15–20% discount for distances beyond specified thresholds (e.g. >1400 km for coal)
- Short-lead: For cargo up to 90 km (excluding coal/iron ore), discounts vary by distance (up to 50%)
6. Other non-tariff incentives
- Alternative Goods Sheds: No terminal charge (normally ₹20/tonne) if used non-busy sheds.
- Mini Rake Scheme: Up to 20-wagon rakes eligible for train-load rates with lower charges.
- Bagged Consignments in Open Wagons: 30% freight discount during peak seasons when covered wagons are unavailable
📦 Parcel & Kisan-Focused Incentives
– Operation Greens Subsidy (Parcel Traffic)
- 50% subsidy on parcel freight for selected fruits (mango, litchi, banana, apple, etc.) and vegetables (onion, tomato, ginger, etc.) transported via Kisan Rail
– Parcel Train Indents
- Indentation (booking) of parcel vans up to 120 days in advance permitted.
- 8% discount over base rate (P-scale) if a full parcel train with at least 24 vans + brake van is indented in a single booking
– Newspapers & Magazines
- A flat 30% discount over standard parcel rates for bulk newspaper/magazine consignments
🛠️ Private Wagon & Terminal Schemes
– General Purpose Wagons (GPW) Scheme
- Allows private parties to invest in wagons (BOX, BCN, etc.).
- Offers 10% freight rebate on loaded movement for 15 years; no freight on empty return journey; no demurrage at private terminals
– Liberalized Special Freight Train Operator (LSFTO)
- For special-purpose wagons (e.g. for bulk cement, fly ash, chemicals, edible oil).
- Private operators get 12% freight rebate for 20 years, with flexibility in rake operations and design support from IR
📊 Summary Table
| Scheme | What It Offers |
|---|---|
| TEFD | 15–20% rebate automatically on empty routes |
| LTTC | Fixed rates and growth/retention-based rebates |
| STS | Up to 30% discount for specific corridor flows |
| RTT | Return trips at lower class rate |
| Long-/Short-Lead Concessions | Tiered discounts based on distance |
| Alternative Goods Sheds | Waiver on terminal charges |
| Mini Rake / Bagged Cargo | Discounts for small rake or open-wagon users |
| Operation Greens (Parcel) | 50% subsidy on select produce via Kisan Rail |
| Parcel Express Indent | 8% discount for full parcel train indent bookings |
| Newspaper Booking | 30% discount on bulk media consignments |
| GPW/LSFTO | 10–12% rebate for private wagon investors |
🧭 Why These Matter
- Boost modal shift: Rail rates become competitive vs. road transport.
- Support agri-traders: Subsidies for perishables help farmers reach key markets.
- Enable efficient logistics: Fixed pricing and rebates give tonnage predictability.
- Encourage private investment: Easier wagon ownership and terminal use broadens service access.
Would you like help with eligibility, application procedures, or current rate schedules for any of these schemes?