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COSTING
&
PRICING ISSUES
IN
TRANSPORT SECTOR
By
Tele :
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+911123382868
+919910487497
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INDRA GHOSH,
ADVISER RATES/RB
RATES/RB,
Slide No. 1
DISCLAIMER
Slide No. 2
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Slide No. 15
Slide No. 16
Section 78.
Notwithstanding anything contained in the railway
receipt,
i t the
th railway
il
administration
d i i t ti
may, before
b f
th
the
delivery of the consignment, have the right to
Re
Remeasure
measure, re
reweigh
weigh or re
reclassify
classify any
consignment;
recalculate the freight
g and other charges;
g ; and
correct any other error or collect any amount that may
have been omitted to be charged.
Slide No. 17
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Slide No. 45
Slide No. 46
Classification of Goods
All commodities have been classified into 16 different
classes for the purpose of charging of freight.
Base
B
class
l is
i class
l 100.*
100 *
Lowest class whose freight is cheapest is LR 4.
This is equivalent to class rate of 60.
60
Highest class whose freight is maximum is 200 for
Petroleum products.*
p
All other commodities come somewhere in between.
Over the years railways have gradually reduced the
number
b off classes
l
f
from
59 to 15.
It has been attempted to fit all commodities into one of
these existing classes only.*
only *
Tuesday, September 06, 2011
Slide No. 47
Classification of Goods
Along with reducing the number of classes, the total
number of commodities which have been so classified
h
have
also
l been
b
reduced.
d d
Over the years railways have reduced the total number
of classified commodities from over 4000 to only 21
groups.
An over ridingg clause stipulates
p
that if anyy commodityy
does not figure in the list of commodities which have
been classified,
then
h it
i should
h ld be
b charged
h
d at the
h highest
hi h class
l rate.**
Type of wagon wise classification.*
Tuesday, September 06, 2011
Slide No. 48
Classification of Goods
Logic given was that railways are simplifying the freight
structure and will be easier for customers to
understand *
understand.
This reduction in number of commodities has been
incorrect.
After
Af all
ll if 4000+ number
b off commodities
di i were being
b i
transported by railways earlier,
then even today more or less the same number of
commodities are likely to be transported.
There may have been some reduction in commodities
d to
due
t block
bl k rake
k movement,*
t*
but such reduction would have been maybe 20%
30% at the most.
It cannot justify such drastic reduction.
Tuesday, September 06, 2011
Slide No. 49
Classification of Goods
As a result of number of classified commodities having
been reduced,
there
th
are large
l
number
b off commodities
diti which
hi h do
d nott
have any class at all.
Present rules stipulate that all of them are to be charged
at a uniform class rate depending on type of wagon.
As a result of the above some of these commodities have
moved to road.
Secondly, by reducing the number of classes from 59 to
15, the
h gap between
b
f i h rates off adjoining
freight
dj i i classes
l
h
has
substantially increased.
Any change of class even by one step increases the
freight rate substantially.
Slide No. 50
Classification of Goods
Slide No. 51
Classification of Goods
Class 140
Class 150
Class 160
Class 170
Class 180
Cl
Class 190
Class 200
Tuesday, September 06, 2011
Slide No. 52
Classification of Goods
Chargeable carrying capacity was made uniform with
effect from 1.4.2005, and
minimum
i i
weight
i ht condition
diti was done
d
away with.
ith
Consignments carried in any type of wagon will be
charged as per the Prescribed Carrying Capacity (PCC)
of that type of wagon.*
For example,
p , earlier bamboo beingg a light
g commodityy
was charged for a minimum weight of 22T.
As per the revised PCC, consignment of bamboo was
charged
h
d for
f the
h full
f ll carrying
i capacity
i off the
h BCN wagon
at 63T.
This resulted in substantial amount of idle freight being
paid for such light weight consignments.
Slide No. 53
Classification of Goods
In order to compensate for the idle freight and reduce the
same to a large extent,
the
th classification
l ifi ti
off light
li ht weight
i ht commodities
diti was
reduced in number of cases,
in order to bring down the overall freight.
freight
Slide No. 54
Classification of Goods
Previous/revised chargeable weight and class :
Commodity
Previous
MWC
Class
Revised
PCC
Class
Bamboo
22
145
63
LR 4
Ch
Charcoal
l
34
130
63
LR 3
Coir
12
190
63
LR 4
Jute
30
160
63
LR 1
Slide No. 55
Slide No. 56
Slide No. 57
100
120
140
160
201 210
147
176
205
235
264
301 310
202
243
283
324
364
401 410
258
309
361
412
464
801 825
494
593
692
790
889
1201 1225
719
863
1007
1151
1295
1501 1525
887
1064
1241
1419
1596
1801 1825
1033
1240
1446
1653
1859
180
Slide No. 58
Slide No. 59
Slide No. 60
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Slide No. 64
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Slide No. 67
Slide No. 68
Slide No. 69
% Increase >
259
229
246
216
187
200
156
161
167
206
196 227 227 227
176
185
141 145
166 166 166
133
127
155 155 155
122
149 149
142
113
100
20
09
20
07
20
05
20
03
20
01
19
99
109 109
19
97
19
93
100
19
95
100
Years
WPI
Tuesday, September 06, 2011
Foodgrain
INDRA GHOSH, Adviser/Rates
Slide No. 70
229
187
200
156
113
122 127
161
167
196
206
216
227
176
175 175 175
100
20
09
20
07
20
05
20
03
20
01
19
97
19
95
19
93
100
133
141 145
19
99
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Fertilizer
INDRA GHOSH, Adviser/Rates
Slide No. 71
229
187
200
156
113
122 127
100
161
167
206
176
182
141 145
142 142
196
216
123
20
09
20
07
20
05
20
03
20
01
19
99
112
19
95
100 104
19
93
100
133
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Coal
INDRA GHOSH, Adviser/Rates
Slide No. 72
% Increase >
259
229
187
200
156
113
100
100
113
161
167
196
206
216
176
141 145
133
158 163 160
127
155
122
149 149
148 148 148
133
157
138
132
121
126
20
09
20
07
20
05
20
03
20
01
19
99
19
97
19
95
19
93
100
Years
WPI
Tuesday, September 06, 2011
HSD
INDRA GHOSH, Adviser/Rates
Slide No. 73
229
187
200
156
113
122 127
206
176
141 145
144 141
154 154
154 154 157 157 157
150
148
147
168
20
09
20
07
20
05
20
03
20
01
117
19
99
109
19
95
19
93
100
161
167
196
216
129
100
100
133
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Cement
INDRA GHOSH, Adviser/Rates
Slide No. 74
229
187
200
156
20
09
20
07
20
05
114
176
20
03
19
93
100
106
19
95
100
206
136
131 133
130
128
126
125
124 124 124 126 126 126 126
20
01
100
133
161
167
196
216
141 145
19
99
113
122 127
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Slide No. 75
229
187
200
156
113
122 127
206
176
143
150
123
20
09
20
07
20
05
20
03
20
01
19
99
112
19
95
100 104
19
93
161
167
196
216
141 145
138 138
100
100
133
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Other Goods
INDRA GHOSH, Adviser/Rates
Slide No. 76
Slide No. 77
Slide No. 78
Slide No. 79
Slide No. 80
Slide No. 81
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Slide No. 95
Slide No. 96
Slide No. 97
Slide No. 98
Slide No. 99
229
187
200
100
176
198 198 198 198
167
162
153
141
141
20
07
20
05
20
03
20
01
106
134
117
19
99
19
93
100
206
128
19
95
100
196
216
20
09
113
122 127
161
188 156
188 188
141 145
133 163
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
I AC
INDRA GHOSH, Adviser/Rates
229
187
200
206
176
167
195 195 195 195 195 195 195
185
149
20
09
20
07
20
05
20
03
121
20
01
110
19
95
19
93
100 100
196
216
133
100
100
133
161
183 156
183 183
141 145
19
99
113
122 127
19
97
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
3 AC
INDRA GHOSH, Adviser/Rates
229
187
200
122
176
167
195 195 195 195 195 195 195
185
149
20
09
20
07
20
05
20
03
121
20
01
110
19
95
19
93
100 100
196
206
216
133
100
100
133
161
183 156
183 183
141 145
19
99
113
127
19
97
% Increease >
259
Years
WPI
Tuesday, September 06, 2011
3 AC
INDRA GHOSH, Adviser/Rates
229
187
200
156
133
144
20
09
20
07
20
05
126
20
03
111
117
19
97
19
95
19
93
100
106 106
176
100
100
206
20
01
113
122
127
161
167
196
216
141 145
19
99
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Sleeper Class
INDRA GHOSH, Adviser/Rates
229
187
200
156
111
106
20
09
20
01
19
99
19
97
19
95
19
93
176
141 145
100
100
206
216
20
07
133
196
20
05
113
122
127
161
167
20
03
% Increase >
259
Years
WPI
Tuesday, September 06, 2011
Second Class
INDRA GHOSH, Adviser/Rates
Review
Any
questions
please
l
?
Thank You
COSTING
&
PRICING ISSUES
IN
TRANSPORT SECTOR
By
INDRA GHOSH,
ADVISER RATES/RB,
Tele :
EMail
+911123382868
+91 99104 87497
+919910487497
advrates@rb.railnet.gov.in
Review