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It is observed from Table 16 that while multi-modal transportation requires a longer transit time than for road transportation, the economies of scale for multi-modal transportation are clearly evident, especially when rake capacity increases.

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20 Percentage of cargo in India that is containerized

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It is observed from Table 16 that while

multi-modal transportation requires a

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longer transit time than for road transportation

longer transit time than for road

transportation, the economies of scale

for

multi-modal

clearly evident, especially when rake

capacity increases. The cost of road

transportation is almost always higher

than for multi-modal transportation for

every route.s

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It is evident from the data shown in Table 16 that for scale economies, the share of railways in carrying

freight should increase beyond the current level. In the US and China, railways carry 47-48% of the total

freight volume. According to a study by McKinsey & Co.9, in China, roads, railways and waterways

carried 22%, 47% and 30%, respectively, of the total freight volume shipped in 2007.

The ideal modal mix for India, as reported by McKinsey & Co., should be an even balance between

roads and railways, each carrying about 46-47% of the total freight volume. A 2012 study by Frost &

Sullivan10 reports that the major industries in India availing multi-modal transportation services are

engineering goods, pharmaceuticals, retail, automotive, auto components, electronics and

communication. A majority of these industries use a combination of roads and railways although some

of them also use a combination of roads and airways, and roads and waterways, depending on the

nature of shipment, network, transit time and cost economies.

Some of the major concerns expressed by the survey respondents regarding multi-modal

transportation are the lack of coordination between road transport and railways, loading delay at

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incompatible policies and procedures between road and rail transportation, and an inability of service

providers to offer efficient, seamless and end-to-end transportation solutions.

Another problem associated with freight transportation by railways is the low level of cargo

containerization in India. While in developed countries, the level of cargo containerization is 80%, in

India the ?gure is 20%. To increase the share of railways in freight movement, the level of cargo

containerization must be enhanced.

The cost of road transportation is almost always higher than that for multi-modal

transportation for every route.

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